This large gas distribution company is set for a record year
Ashu Shinghal, Managing Director of MGL told CNBC-TV18 that the overall volume growth for the current financial year (FY24) is expected to be around 5%, while for the next year (FY25( it will be 6-7%.
Mahanagar Gas (MGL), one of India's leading city gas distribution companies, is set to have a record year in terms of EBITDA (earnings before interest, taxes, depreciation, and amortisation) per unit (standard cubic meter or scm).
The company revised its guidance for FY24 EBITDA to ₹12-13 per scm after the third quarter earnings from ₹10-12 per scm projected earlier. For the first nine months of the year (9MFY24), the EBITDA/scm was at ₹14.9, up 77% year-on-year.
Ashu Shinghal, Managing Director of MGL told CNBC-TV18 that the overall volume growth for the current financial year (FY24) is expected to be around 5%, while for the next year (FY25) it will be 6-7%.
MGL posted Q3FY24 revenues of ₹1,569.00 crore, a decrease from ₹1,571.00 crore year-over-year (YoY).
The company recently acquired 100% equity shares of Unison Enviro for a cash consideration of ₹562.09 crore, post which, Unison Enviro will become a wholly-owned subsidiary of MGL.
Unison, currently, is contributing 0.1 million metric standard cubic meters per day (mmscmd) to volume and will contribute 1.1 mmscmd to volumes in the next 7-8 years, he said.
In terms of diversification, the company has taken a few steps. MGL has formed a joint venture (JV) company with Baidyanath LNG for setting up liquefied natural gas (LNG) stations. “We are expecting around 5-6 stations to be set up in one-year’s time,” he said.
It is also in the final stage of concluding a compressed biogas (CBG) facility in Mumbai in collaboration with the Brihanmumbai Municipal Corporation (BMC), with an investment of approximately ₹500 crore.
In terms of electric vehicles (EVs), MGL has recently announced an acquisition of 31% equity in 3ev Industries.
3ev, an EV original equipment manufacturer (OEM) headquartered in Bengaluru, provides comprehensive micro-mobility solutions, encompassing hyperlocal services like small-parcel deliveries and freight transport.
Brokerage firm Motilal Oswal has a 'buy' rating on the stock with a target price of ₹1,665 per share. Shares of IGL have gained close to 75% over the past year.
The current market capitalisation of the company is ₹14,936 crore.
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(Edited by : Shweta Mungre)
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