Reliance Securities: No Respite In Sight For Mahanagar Gas
BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Reliance Securities Report
Total sales volume of Mahanagar Gas Ltd. is expected to clock only 3% compound annual growth rate over FY20-23E on the back of
1. very little space to more vehicle addition in Mumbai owing to the highest vehicular density (1,900/km);
2. no new geographical area to aid volume growth story; and
3. no allocation for adding compressed natural gas buses in 2020-21 budget of Municipal Corporation of Greater Mumbai (MCGM).
The company had earlier guided that sales volume from Raigad geographical area to touch 0.6 million metric standard cubic meter per day (mmscmd) in FY23E.
To achieve this target, Mahanagar Gas should have set up approximately 100 CNG stations, while it set up only 15 CNG stations so far and is expected to add five to 10 CNG stations annually over the next three years.
We believe these new stations will add only 50,000kg/day to Mahanagar Gas’s CNG sales volume by FY23E, which is less than 2% of expected total sales volume of 3.2 mmscmd.
Click on the attachment to read the full report:
This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.