Mahanagar Gas hits 52-week high; soars 7% on margin improvement in Q4

Shares of Mahangar Gas (MGL) hit a 52-week high of Rs 1,072.35, soaring 7 per cent on the BSE in Tuesday’s intra-day trade after operating profit of the company improved sequentially in March quarter (Q4FY23) due to decline in procurement costs. The company’s EBITDA/scm came in above estimates at Rs 12.8 due to lower-than-estimated gas cost. Motilal Oswal Financial Services had expected EBITDA/scm at Rs 8.2. MGL posted a 104 per cent year-on-year (YoY) and 56 per cent quarter-on-quarter (QoQ) jump in its profit after tax (PAT) at Rs 268.81 crore from Rs 131.80 crore in corresponding quarter last year. Revenue from operations increased 49 per cent YoY and were down 4 per cent QoQ to Rs 1,771.8 crore. Government of India revised the Administered Price Mechanism (APM) gas price with a ceiling of $6.5/mmbtu (floor price of US$4/mmbtu) for the next two years. This has further brought down the sourcing cost and the company passed on the benefit to customers by cutting CNG and PNG prices. In the current quarter (Q1FY24-TD), spot LNG prices have further softened to ~$12/mmbtu from $17/mmbtu seen in the previous quarter. Sales volume growth will be the key monitorable, going ahead, ICICI Securities said in a note. Meanwhile, the board has recommended a final dividend of Rs 16 per equity share having face value of Rs 10 each (i.e. 160 per cent) for the financial year 2022-2023 (FY23).