Volume recovery, improving margins to give MGL a boost
Though MGL’s overall gas volume is expected to decline by 20-25% for FY21, it is likely to shoot up by 35-37% in FY22 aided by new domestic connections, increasing retail footprint and expanding presence in the industrial town of Raigad.
At Wednesday’s closing price of Rs 905.6 on the BSE, the stock was traded at 10 times FY22 earnings.
ET Intelligence Group: The stock of city gas distributor Mahanagar Gas (MGL) has underperformed peers in 2020 so far due to a slower recovery in gas offtake in its key market of Mumbai and suburbs. However, the trend is likely to change considering its gas volume has reached the pre-pandemic level. MGL also reported better operating profitability in the September quarter. On Wednesday, the stock gained 4% in a volatile market.MGL’s gas volume