Mahanagar Gas Ltd (MGL) AI Stock Analysis

• Market Cap: ₹119.45B
• Dividend Yield: 2.62%
• Average Volume (3M): 14.39K
• Price to Earnings (P/E): 12.6
• Beta (1Y): 1.36
• Revenue Growth: 19.78%
• EPS Growth: -14.38%
• Country: IN
• Employees: 532
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 20.40
• Shares Outstanding: 98,777,780
• 10 Day Avg. Volume: 12,519
• 30 Day Avg. Volume: 14,387
• PEG Ratio: -0.69
• Price to Book (P/B): 2.33
• Price to Sales (P/S): 1.88
• P/FCF Ratio: 61.72
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: ₹1,355.83
• Price Target Upside: 17.56% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 93.26
• Revenue Forecast (FY): ₹81.44B

• Rating: 73 Outperform
• Price Target: ₹1,286.00 ▲(11.51% Upside)
• Action: Upgraded Date: 02/07/26
• Date: Action: Upgraded 02/07/26

The score is primarily driven by strong underlying financial health (especially a sturdy balance sheet) and attractive valuation (low P/E with a solid dividend). These positives are tempered by mixed technical signals (negative MACD and longer-term trend below the 100/200-day averages) and recent free cash flow weakness.

Positive Factors

Regulated CGD business model

MGL’s core business is regulated city gas distribution across authorized geographic areas with owned pipeline and station infrastructure. This durable model creates predictable volume-based revenues, high barriers to entry for competitors and long-lived assets that underpin steady cash generation over multi-year horizons.

Consistent revenue growth

Nearly 20% reported revenue growth reflects expanding CNG and PNG volumes and stronger industrial/commercial offtake. Sustained top-line growth signals increasing network utilization and customer penetration, supporting durable earnings expansion and the ability to fund incremental infrastructure spend without relying solely on external financing.

Strong balance sheet

The company’s low leverage and high equity ratio provide financial resilience and flexibility for capex, network expansion, and regulatory cycles. A solid balance sheet reduces refinancing risk, supports strategic investments in distribution infrastructure and preserves dividend capacity through economic downturns.

Negative Factors

Volatile free cash flow

A marked drop in free cash flow despite strong operating cash conversion highlights variability in cash available for reinvestment, debt paydown or shareholder returns. Persistent FCF volatility can constrain capital allocation, raise funding needs for network projects and increase reliance on external financing during capex cycles.

Margin and EBIT pressure

Although gross profitability remains healthy, slipping net margins and a small EBIT decline indicate rising costs or pricing pressures that can erode long-term profitability. If procurement, compression or regulatory costs persist, sustaining historical returns will require efficiency gains or tariff adjustments subject to regulatory frameworks.

Earnings per share decline

Negative EPS growth signals weaker per-share earnings despite revenue gains, suggesting margin squeeze, higher costs, or one-off impacts. Continued EPS contraction would reduce internal capital generation and could limit dividends or share-level returns, making earnings recovery a key medium-term objective for investors.

Mahanagar Gas Ltd Business Overview & Revenue Model

Company Description

Mahanagar Gas Limited operates as a natural gas distribution company in India. The company provides domestic piped natural gas (PNG), commercial PNG, industrial PNG, and compressed natural gas (CNG), as well as manufactures gas geysers. It operates 290 CNG filing stations that provides gas to approximately 8.5 lakh vehicles with 1,738 dispensing points; 550 km of steel pipeline and approximately 5,670 km of MDPE pipeline; and 4,339 commercial and industrial customers. The company's PNG is used for various applications, such as cooking and water heating, as well as in hospitals, nursing homes, hotels, flight kitchens, restaurants, places of worship, etc. Mahanagar Gas Limited was incorporated in 1995 and is based in Mumbai, India.

How the Company Makes Money

Mahanagar Gas Ltd generates revenue through multiple streams primarily focused on the sale of piped natural gas (PNG) and compressed natural gas (CNG). The key revenue model includes charging customers for the quantity of gas consumed, with pricing regulated by the government to ensure fairness in the market. MGL also earns money from the installation and maintenance of gas connections for residential and commercial consumers. Additionally, partnerships with various stakeholders, including gas suppliers and local governments, enhance its operational efficiency and market reach. The growing demand for cleaner energy solutions, alongside expansion into new geographic areas, significantly contributes to MGL's revenue growth.

Mahanagar Gas Ltd Financial Statement Overview

Summary

Strong balance sheet (low leverage, high equity ratio) and solid revenue growth support a high score, partially offset by variability and a sharp drop in free cash flow in the latest year and slightly softer profitability trends.

Income Statement

Mahanagar Gas Ltd has shown solid revenue growth from 2022 to 2025, with a notable increase in total revenue from 2024 to 2025. The gross profit margin remained strong, although net profit margins have slightly declined over the years. The EBIT and EBITDA margins indicate efficient operational performance, though there's a slight decline in EBIT in 2025. Overall, the income statement reflects a stable and growing revenue base with strong profitability.

Balance Sheet

The company's balance sheet exhibits strong financial health, with a low debt-to-equity ratio indicating low leverage. The equity ratio is robust, showcasing a solid foundation of stockholders' equity relative to total assets. Return on equity remains strong, albeit slightly declining in the most recent year. Overall, the balance sheet demonstrates financial stability and efficient capital management.

Cash Flow

Mahanagar Gas Ltd has exhibited fluctuating free cash flow growth, with a significant decrease in free cash flow from 2024 to 2025. The operating cash flow to net income ratio is strong, indicating efficient cash generation from operations. However, the drop in free cash flow signals potential challenges in maintaining cash reserves. Overall, while operational cash flow remains strong, the variability in free cash flow suggests a need for improved cash management.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	76.81B	72.64B	62.90B	62.99B	35.60B	21.53B
Gross Profit	25.66B	25.84B	26.45B	12.59B	15.15B	9.40B
EBITDA	17.50B	15.70B	20.19B	12.96B	10.10B	10.14B
Net Income	10.70B	10.41B	12.76B	7.90B	5.97B	6.20B
Balance Sheet
Total Assets	0.00	82.70B	73.81B	60.32B	52.34B	46.01B
Cash, Cash Equivalents and Short-Term Investments	13.87B	13.87B	14.39B	15.31B	15.51B	14.86B
Total Debt	0.00	2.01B	1.41B	1.15B	1.03B	741.05M
Total Liabilities	-58.95B	23.75B	22.46B	18.98B	16.36B	13.69B
Stockholders Equity	58.95B	58.80B	51.30B	41.34B	35.97B	32.32B
Cash Flow
Free Cash Flow	0.00	2.22B	8.33B	2.56B	2.55B	4.66B
Operating Cash Flow	0.00	14.06B	15.68B	9.69B	9.04B	8.06B
Investing Cash Flow	0.00	-10.52B	-10.82B	-6.49B	-5.39B	-4.44B
Financing Cash Flow	0.00	-3.32B	-4.99B	-2.85B	-3.10B	-3.49B

Mahanagar Gas Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1153.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:MGL, the sentiment is Positive. The current price of 1153.3 is above the 20-day moving average (MA) of 1142.01, above the 50-day MA of 1106.49, and below the 200-day MA of 1251.68, indicating a neutral trend. The MACD of 30.22 indicates Negative momentum. The RSI at 66.37 is Neutral, neither overbought nor oversold. The STOCH value of 88.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:MGL.

Mahanagar Gas Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TORNTPOWER	75 Outperform	₹784.48B	24.99	―	1.48%	-1.26%	27.83%
IGL	75 Outperform	₹233.52B	14.40	―	0.77%	8.88%	-13.51%
MGL	73 Outperform	₹119.45B	12.58	―	2.62%	19.78%	-14.38%
CESC	73 Outperform	₹203.54B	14.24	―	3.56%	10.58%	2.69%
GENUSPOWER	68 Neutral	₹78.32B	13.34	―	0.82%	129.98%	215.49%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
RELINFRA	60 Neutral	₹35.08B	0.54	―	―	-10.55%	-5.08%

Mahanagar Gas Ltd Corporate Events

Mahanagar Gas Ltd Restores Normalcy After Pipeline Disruption

Mahanagar Gas Ltd addressed a recent incident involving a damaged gas pipeline operated by GAIL (India) Limited, which disrupted the gas supply to Mumbai and its suburbs. Despite the interruption, MGL managed to maintain full supply to domestic and small commercial consumers by utilizing other City Gate Stations (CGS) and ensured that 60% of CNG stations remained operational. The company confirmed that operations have returned to normal, and the disruption did not meet the materiality thresholds for mandatory disclosure under SEBI regulations.