Mahanagar Gas (NSE:MGAS), in its Q2FY24 report, has shown significant year-on-year growth. The company reported EBITDA and PAT figures at INR 4.8 billion and INR 3.4 billion respectively, although these numbers fell short of ICICI Securities' expectations.
A modest volume growth of 3.4% was recorded for the quarter. However, strong earnings were driven by a year-on-year increase of INR 6.6 per scm in EBITDA/scm, attributed to lower gas costs and a slight dip in realizations.
Looking forward, ICICI Securities anticipates further improvements in MGL's volume and margin for FY24E. This optimism is due to factors such as the impact of Unison's acquisition, which includes 3GAs: Ratnagiri, Chitradurga & Devangere, and Latur & Osmanabad districts. The implementation of a new pricing policy and a moderate gas price environment are also expected to contribute to MGL's growth.
In light of these developments, ICICI Securities has marginally revised MGL's target price upwards to INR 1,350. This strategic move is projected to significantly influence MGL's growth trajectory.
InvestingPro Insights
InvestingPro real-time data and tips highlight some promising aspects for Mahanagar Gas (MGL). The company's perfect Piotroski Score of 9 is a strong indicator of its financial health and is a significant factor to consider. Additionally, MGL's high return on invested capital and its operation with a high return on assets suggest effective management and profitable investment decisions.
InvestingPro also points out that MGL is trading at a low earnings multiple, which could make it an attractive investment opportunity. It's worth noting that the company holds more cash than debt on its balance sheet, an encouraging sign of its financial stability.
InvestingPro Tips also underline MGL's position as a prominent player in the Gas Utilities industry. With the company's liquid assets exceeding short-term obligations, it's in a strong position to meet any immediate financial demands.
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