|
The foreign broker's latest target price of Rs 1,320 is higher from its previous target of Rs 1,100.
According to the media reports, the broker underlined the company's recent Original Equipment Manufacturer partnerships as a significant factor, implying that these strategic alliances will boost volume growth for Mahanagar Gas. A robust margin visibility is backed by the lower HPHT (High Pressure High Temperature) gas cost coupled with the company's top-tier position in resource allocation.
An optimistic view on the company's future performance has led to an increased estimation for FY24/25 earnings by 6% and 27% respectively. This increase is based on the prediction of higher volume and margin estimates.
Furthermore, the broker highlighted the favorable risk-reward scenario with the current valuation, which stands at 10 times the forward price-to-earnings ratio, is lower than the five-year historical average.
MGL is engaged in the business of City gas distribution (CGD), supplying natural gas in the state of Maharashtra. The company's net profit rose 98.92% to Rs 368.40 crore, while net sales rose 5.71% to Rs 1537.79 crore in Q1 June 2023 over Q1 June 2022.
|