Citi has retained its ‘Buy’ rating on Mahanagar Gas Ltd (MGL) and raised its target price to ₹1,700 from ₹1,670, following a Q4 performance that was broadly in line on adjusted EBITDA, with a one-time provision reversal providing a short-term boost.
While the headline EBITDA beat came from a reversal in earlier provisions, Citi noted that underlying operational performance matched expectations, with volume growth tracking in line with the company’s guidance.
MGL has reiterated its 10% volume growth guidance for FY26, supported by higher industrial and domestic PNG usage and rising CNG adoption among urban transport fleets. EBITDA margins are expected to sustain at ₹9+/scm, aided by improved sourcing efficiency and stable input costs.
Citi believes MGL offers a strong earnings visibility and defensive positioning in India’s urban energy mix. The stock continues to benefit from stable regulatory outlook and predictable cash flows, making it an attractive pick in the city gas distribution space.
Disclaimer: The above views are those of the brokerage and not the publication. Investors should consult a certified financial advisor before making investment decisions.
