Mahanagar Gas Q1 Review - Margin Sustainability The Biggest Question: Motilal Oswal
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Motilal Oswal Report
Mahanagar Gas Ltd. reported a beat on our estimates, led by highest ever Ebitda/standard cubic meter (of Rs 13.9), on the back of improved realisation, with lower gas cost.
Total volumes were in line, down 17% QoQ at 2.4 million metric standard cubic meter per day (compressed natural gas down 23%), impacted by the second wave of Covid-19 led lockdowns.
Mahanagar Gas' management said that prices of CNG and piped natural gas industrial/commercial are linked to prevailing prices of alternate fuels.
Negotiations with oil marketing companies on higher commissions to sell CNG are still on, which combined with an increase in domestic administered pricing mechanism gas prices could be critical for margin.
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