Mahanagar Gas (MAHGL IN) – Q3FY26 Result Update – Strong volume growth guidance – Downgrade to ‘Accumulate’
Published on 09 Feb 2026
We revise our rating to ‘Accumulate’ driven by the impact of BEST’s transition from CNG buses to EVs, while upcoming large CNG stations provide medium-term support. MAHGL reported flat QoQ volumes at 4.6mmscmd (PLe: 4.7mmscmd) in Q3FY26, supported by PNG domestic growth and flat CNG volumes, partly offset by a decline in PNG indus/comm volume due to pipeline damage in Mumbai. Full benefit of the Sep’25 price hike and lower Brent-linked gas costs, partly offset by slight increase in HH prices, lifted adj EBITDA/scm to Rs8.3 (PLe: Rs8.2) vs. Rs8.0 in Q2FY26. Standalone adj EBITDA rose to Rs3.5bn vs. Rs3.4bn/Rs3.2bn in Q2FY26/Q3FY25, and adj PAT increased 4.4% QoQ. BEST’s transition to EV buses reduced volumes by >1 lakh kg/day in Q3FY26, though upcoming large CNG stations at Wadala, WEH and EEH, expected over the next couple of years, could support volumes in the medium term. We revise the volume growth to 10% YoY (previous: 10.1%/11.2%) and adj EBITDA/scm to Rs9.0 (previous: 9.5/10.0) for FY27/FY28E. Valuing the company at 12x Dec’27E EPS (previous: 13x), we revise our rating to ‘Accumulate’ from ‘BUY’ with TP of Rs1,305 (previous: Rs1,356).
