Mahanagar Gas shares jump 3% after Q3 net profit beats estimates
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Over the past six months, Mahanagar Gas shares have seen a rise of 25 percent.
Shares of Mahanagar Gas gained 2.8 percent in trade on January 24 after the company’s quarterly earnings came in higher than estimates.
Mahanagar Gas reported a consolidated net profit of Rs 317.18 crore in the December 2023 quarter, which is 84 percent higher that Rs 172.07 crore recorded a year ago, thanks to lower gas costs.
As of 12.15pm, shares of Mahanagar Gas were trading at Rs 1,316.70 each, higher by 0.28 percent from the previous session’s closing price.
Its earnings before interest, tax, depreciation and amortisation (EBITDA) came in at Rs 496.76 crore during the third quarter, which is 72.27 percent up from Rs 288.35 crore recorded a year back.
The EBITDA margin was a little better than expected at Rs 13.3/scm due to lower average gas cost, said JM Financial.
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Jefferies reiterated its ‘buy’ call on the counter, with a target of Rs 1,450 per share. The EBITDA came in 19 percent higher than the Jefferies estimates, as did the gross margins, on account of lower feedstock costs. Net profit, too, came in 23 percent above the brokerage estimates.
The international brokerage added that the overall volumes were in line with estimates. Following the OEM partnership, Jefferies will look at the management’s guidance on volume gains.
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JMFL maintained its ‘buy’ rating on valuations, robust pricing power and steady volume growth. However, some key risks for the counter are a further cut in domestic gas allocation, a sharp hikespot LNG gas price or the rise in penetration of electric vehicles.
Over the past six months, Mahanagar Gas shares have seen a rise of 25 percent. In comparison, the Nifty 50 has gained around 9.5 percent during the same time period.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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