Mahanagar Gas (MAHGL IN) – Q1FY27 Result Update – Volume growth remains intact – ACCUMULATE
Published on 01 Aug 2026
Total volumes grew 7.0% YoY to 4.8mmscmd (PLe: 4.8mmscmd), driven by healthy CNG/PNG-Dom volume growth of ~9.7%/9.1% YoY, partly offset by 7.2% YoY decline in PNG-I/C volumes. Benefits of price hikes, coupled with minimal Brent-linked gas sourcing, led to an Adj. EBITDA beat at INR3.4bn (PLe: INR2.4bn; BBGe: INR2.6bn). As a result, EBITDA/scm came in at INR7.9/scm (PLe: INR5.5/scm) vs Rs6.2/scm in Q4FY26 and INR9.6/scm in Q1FY26. Management increased FY27 capex guidance to INR18bn from INR12bn to accelerate infrastructure expansion for PNG-Dom growth opportunity and investment towards CBG plant. We build in volume growth of 8.0%/11.2% in FY27/FY28E (earlier - 8.6%/10.6%) to reflect lower PNG-I/C volumes in FY27E. We estimate EBITDA/scm of Rs8.0/Rs8.4 for FY27/FY28E. Maintain "Accumulate" with a revised TP of INR1,254 (previous: INR1,283), based on 12x FY28E EPS, reflecting higher interest costs as we factor in incremental debt to support the increased capex.
