Mahanagar Gas Ltd (MGL) stock was up by 3.3% for the day and touched the intraday high of Rs 1,320 on BSE in today’s trade. This rise follows the company’s Q3FY25 results announcement on Tuesday, during which global brokerage firms CLSA and Macquarie gave positive calls on the stock even as it pared 30% annualized net profit.
The net profit for the third quarter, which ended December 31, was Rs 221 crore, against a net profit of Rs 317 crore in the same quarter of the previous year.
The reduced amount of gas through APM had impacted negatively on the degree of profitability.
Revenue from operations, on the other hand, rose 17.8% YoY to Rs 2,031.51 crore from Rs 1,723.77 crore. At the same time, EBITDA went down by 21% YoY to Rs 314.42 crore.
In the quarter, APM cut down supplies of natural gas for the CNG segment, which sought the profitability of the city gas distribution companies. As a result, these companies were compelled to meet the supply gap by sourcing dearer natural gas to supply CNG to the end users.
For this reason, MGL’s cost of natural gas and traded items rose by 37 percent to Rs 1,268.58 crore for the quarter from Rs 923 crore reported a year earlier.
Post The Q3 Results
CLSA: Outperform | Target price: Rs 1,710
CLSA remained bullish for MGL with an ‘Outperform’ recommendation and a target of Rs 1,710. They pointed out a pleasant on the margins for which PAT came above expectation.
It was mentioned that volumes were as per plan and, therefore, sales, which, when combined with lower taxes, was enough to cover higher depreciation and interest expenses.
Macquarie: Outperform | Target price: Rs 1,280
Macquarie has an “Outperform” rating on MGL, with a target of Rs 1,280. Having observed that the income level was relatively satisfactory, they pointed to a disappointment in terms of the margins.
Dividend Declaration
In addition to its financial results, MGL’s board of directors declared an interim dividend of ₹12 per equity share, further enhancing shareholder value amid challenging market conditions. The dividend declaration is set for record on February 3, 2025, with payments expected within 30 days of approval.