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Equity Bottom-Up

<ul><li>Our BUY recommendation on Mahanagar Gas (MGL) with a target price of INR 1,240 is premised on (1) attractive valuation, (2) improvement in volume growth due to the acquisition of Unison Enviro’s (UEPL) three geographical areas, and (3) decline in input gas cost</li><li>Q2FY24 EBITDA, at INR 4.8bn, and APAT, at INR 3.4bn, came well above our estimates, owing to higher-than-expected per unit EBITDA margins and volume.</li><li>Our target price of INR 1,240/sh is based on Mar-25E free cash flow (WACC 12%, terminal growth rate 0%). The stock is currently trading at 8.9x Mar-25E EPS.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Our BUY recommendation on Mahanagar Gas (MGL) with a target price of INR 1,240 is premised on (1) attractive valuation, (2) improvement in volume growth due to the acquisition of Unison Enviro’s (UEPL) three geographical areas, and (3) decline in input gas costQ2FY24 EBITDA, at INR 4.8bn, and APAT, at INR 3.4bn, came well above our estimates, owing to higher-than-expected per unit EBITDA margins and volume.Our target price of INR 1,240/sh is based on Mar-25E free cash flow (WACC 12%, terminal growth rate 0%). The stock is currently trading at 8.9x Mar-25E EPS.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Mahanagar Gas (Q2FY24): Attractive Valuation. Maintain BUY

<ul><li>Mahanagar Gas (MGL) stock price has corrected ~12% from the highs of August 2023 owing to weaker-than-expected volume growth</li><li>However, we expect the implementation of Kirit Parikh Committee recommendations from April 2023 and a decline in input gas costs to improve MGL’s volume growth</li><li>Additionally, with the rise in crude oil prices sequentially, the risk of CNG price discount to petrol and diesel prices narrowing has declined</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Mahanagar Gas (MGL) stock price has corrected ~12% from the highs of August 2023 owing to weaker-than-expected volume growthHowever, we expect the implementation of Kirit Parikh Committee recommendations from April 2023 and a decline in input gas costs to improve MGL’s volume growthAdditionally, with the rise in crude oil prices sequentially, the risk of CNG price discount to petrol and diesel prices narrowing has declinedContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Mahanagar Gas: Risk-Reward Favourable, Upgrade to BUY

Mahanagar Gas - Risk-Reward Favourable, Upgrade to BUY

<ul><li>Our ADD recommendation on Mahanagar Gas (MGL) with a target price of INR 1,170 is premised on (1) lower volume growth compared to peers and (2) long-term volume growth visibility remaining low since no new geographical areas (GA) were won in the 9/10/11th round of CGD bids</li><li>However, their recent acquisition of Unison Enviro’s (UEPL) three GAs remains a key monitorable</li><li>Q1FY24 EBITDA, at INR 5.2bn, and APAT, at INR 3.7bn, came well above our estimates, owing to higher-than-expected per unit EBITDA margins</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Our ADD recommendation on Mahanagar Gas (MGL) with a target price of INR 1,170 is premised on (1) lower volume growth compared to peers and (2) long-term volume growth visibility remaining low since no new geographical areas (GA) were won in the 9/10/11th round of CGD bidsHowever, their recent acquisition of Unison Enviro’s (UEPL) three GAs remains a key monitorableQ1FY24 EBITDA, at INR 5.2bn, and APAT, at INR 3.7bn, came well above our estimates, owing to higher-than-expected per unit EBITDA marginsContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Mahanagar Gas (Q1FY24): Margins Offset Weak Volume Growth. Maintain ADD

Thematic (Sector/Industry)

<ul><li>Britannia Industries: Britannia’s Q1FY24 revenue/EBITDA/PAT growth of 9/38/36% was strong but below expectations</li><li>Transactions grew 9% YoY while volumes were flat, reflecting huge down-trading pressure</li><li>Britannia took price corrections to defend its market share as competitive intensity rose (particularly from local/regional brands)</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Britannia Industries: Britannia’s Q1FY24 revenue/EBITDA/PAT growth of 9/38/36% was strong but below expectationsTransactions grew 9% YoY while volumes were flat, reflecting huge down-trading pressureBritannia took price corrections to defend its market share as competitive intensity rose (particularly from local/regional brands)Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

HSIE Results Daily: Britannia Industries, Godrej Consumers, Balkrishna Industries

India

Mahanagar Gas Limited (MGL) distributes natural gas. The Company provides gas to domestic customers such as hospitals, nursing homes, hotels, flight kitchens, and restaurants. MGL serves customers in India.

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