Mahanagar Gas Ltd (MGL) posted a healthy performance in the fourth quarter of FY24, with improvements in revenue, profit, and operating margins. The company’s net profit came in at ₹252.2 crore, up 11.9 percent quarter-on-quarter from ₹225 crore in Q3 FY24, supported by better cost control and consistent volume growth in its city gas distribution business.
Revenue during the quarter rose by 6.1 percent sequentially to ₹1,865 crore, compared to ₹1,758 crore in the previous quarter. The company reported an EBITDA of ₹378.4 crore, up 20.5 percent from ₹314 crore, translating to an EBITDA margin of 20.3 percent versus 17.9 percent earlier. This marked a significant margin improvement, highlighting MGL’s ability to manage input costs effectively in a volatile energy pricing environment.
MGL’s stock currently trades at ₹1,388, with a price-to-earnings ratio of 13.1, well below the industry average of 16.7, suggesting relative valuation comfort. The company maintains strong fundamentals, with a return on equity of 18.9 percent and return on capital employed of 24.5 percent. It also boasts a low debt-to-equity ratio of 0.03 and zero pledged promoter holdings.
Over the last three years, MGL has recorded a compound annual profit growth of 21 percent and sales growth of nearly 25 percent. Despite a trailing twelve-month dip in profit of 19 percent, the company remains a consistent cash generator, having posted ₹793 crore in free cash flow for FY24 and ₹1,843 crore over the past three years. Net profit margin for the year stood at 15.1 percent, and the return on assets was a strong 13.5 percent.
Shareholding data shows that promoter holding remains unchanged at 32.5 percent. FII interest has slightly declined to 23.76 percent, while DIIs have increased their stake to 23.82 percent as of March 2025. Public shareholding is relatively low at 9.92 percent, indicating strong institutional confidence.
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Analyst sentiment is mixed but generally positive. Out of 29 analysts tracking the stock, 52 percent have a ‘Buy’ rating, 21 percent suggest ‘Outperform’, and 10 percent maintain a ‘Hold’. A small segment of analysts remain cautious, with 3 percent marking it ‘Underperform’ and 14 percent assigning a ‘Sell’ rating.
With improved margins, stable earnings, and a strong balance sheet, Mahanagar Gas remains a steady defensive play in the city gas distribution space, though near-term stock movement may remain range-bound due to cautious investor sentiment.
Disclaimer
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