India's Mahanagar Gas posts Q2 profit drop on higher fuel costs

Mahanagar Gas

24/10/2024 13:47

Oct 24 (Reuters) - Indian city-gas distributor Mahanagar Gas  MGAS.NS  reported a 16.5%
decline in second-quarter profit on Thursday, hurt by a surge in fuel costs.
    The state-backed natural gas distributor's profit after tax fell to 2.83 billion rupees
(about $34 million) in the quarter ended Sept. 30 from 3.39 billion rupees a year earlier, the
company said in an exchange filing. 
    Its revenue from operations rose 8.6% to 18.77 billion rupees, while total expenses rose 18%
to 15.55 billion rupees, owing to a 20% increase in natural gas costs. 
    For further earnings highlights, (click here)

    
KEY CONTEXT
    Indian city gas distribution firms' earnings have been under pressure as they are forced to
procure gas on the more expensive open market. 
    Allocation of natural gas sold under government-set administered pricing mechanism has
fallen due to lower domestic output. 
    Jefferies had expected allocation of gas under administered pricing mechanism for city gas
distribution firms like Mahanagar Gas, Indraprastha Gas  IGAS.NS  and Gujarat Gas  GGAS.NS  to
decline to 65% in the quarter, leading to higher dependence on imported liquefied natural gas.

PEER COMPARISON

                         Valuation (next  Estimates (next 12  Analysts' sentiment          
                           12 months)          months)                                     
              RIC        PE      EV/EBIT  Revenue  Profit     Mean     No of     Stock to  Div
                                 DA       growth   growth     rating*  analysts  price     yield
                                                                                 target**  (%)
 Mahanagar     MGAS.NS    12.91     8.31   6.72      -1.77    Buy            13    0.87     1.96
 Gas                                                                                       
 Indraprasth   IGAS.NS    15.81    10.25   4.67      5.37     Hold           11    0.82     2.08
 a Gas                                                                                     
 Gujarat Gas   GGAS.NS    24.79    14.99   7.85      21.17    Hold           12    0.94     1.06
 Gail          GAIL.NS    12.81     9.60   4.71      10.46    Hold           25    0.89     2.59
 (India)                                                                                   
 
 * The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and
Strong Sell
** The ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the
stock is trading above the PT       
    
JULY-SEPTEMBER STOCK PERFORMANCE
    
        
              
-- All data from LSEG IBES
-- $1 = 84.0440 Indian rupees

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Mahanagar Gas Sept Qtr 2024 vs Peers    https://tmsnrt.rs/3NzLVaX
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 (Reporting by Ashish Chandra in Bengaluru, Additional Reporting by Manvi Pant; Editing by
Abinaya Vijayaraghavan and Mrigank Dhaniwala)
 ((ashish.chandra@thomsonreuters.com; +91 7982114624;))