Company Update : Mahanagar Gas by Motilal Oswal Financial Services Ltd
Miss on EBITDA/scm margin; Stable volume growth
* Total MAHGL’s total volumes stood at 4.6mmscmd (+3% QoQ).
* CNG/D-PNG volumes grew 2% QoQ, while I&C-PNG volumes grew 8% QoQ.
* EBITDA/scm came in at INR8 (vs. adjusted EBITDA/scm of INR9.6 in 1QFY26).
* On a QoQ basis, adj. EBITDA/scm margin declined by INR1.6, as 1) gas cost increased INR1.4/scm QoQ to INR32.1/scm; 2) realization declined by INR0.1/scm QoQ, and operating cost increased by INR0.1/scm QoQ.
* Reported EBITDA came at INR3.4b (-18%/-33% YoY/QoQ).
* MAHGL’s PAT stood at INR1.9b (-33%/-39% YoY/QoQ).
* UEPL was amalgamated with MAHGL during the quarter. Accordingly, the comparative financial information for 1QFY26 and 2QFY25 has been restated to reflect the impact of the amalgamation and other quarters are not-comparable. Due to unavailability of data, we assume UEPL’s EBITDA/PAT of INR160m/INR50m for 2QFY26 (similar QoQ), and total volume of 0.21mmscmd (up 30% YoY). Comparison of MAHGL SA estimated numbers vs actuals is as below:
* EBITDA came in 8% below our estimate at INR3.2b, as EBITDA/scm stood 8% below estimate at INR8/scm.
* APAT stood 21% below estimates at INR1.9b.
* Total volumes came in line with our estimate at 4.4mmscmd.
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