HDFC Securities is bullish on Mahanagar Gas has recommended buy rating on the stock with a target price of Rs 1292 in its research report dated 01 Aug 2018.
HDFC Securities' research report on Mahanagar Gas
MGL’s adjusted 1QFY19 revenue came in at Rs 6.32bn, up 19.1% YoY led by 12.9% YoY increase in volumes to 2.9mmscmd and higher realisations at Rs 24.2/scm (+6.4% YoY). The company has finalised the negotiations with OMCs with respect to trade discounts and accounted additional discount of Rs 129.3mn relating to period from Jan-15 to Mar-18. This has been netted off from revenue for this quarter.
Outlook
MGL has bid only for 3 GAs. But the choice of the GAs is well thought of as two (Chennai and Visakhapatnam) out of three GAs are high potential and densely populated among the total GAs offered. Our target is Rs 1,292/sh (27x Jun-20E standalone EPS). Maintain BUY.
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