Brokerages have shared their views on Mahanagar Gas Ltd (MGL) stock following its Q3 FY25 results. While analysts see volume growth prospects, concerns remain over margin declines and rising input costs.
Brokerages bullish on MGL stock
CLSA – Outperform | Target Price: ₹1,710
CLSA maintains an ‘Outperform’ rating on MGL, citing a positive margin surprise that drove a PAT beat. The brokerage noted that:
- Volumes came in line with expectations, indicating stability.
- Lower tax expenses helped offset higher depreciation and interest costs, supporting bottom-line growth.
- The company remains well-positioned for sustained performance despite industry headwinds.
Brokerages cautious but optimistic on MGL stock
Macquarie – Outperform | Target Price: ₹1,280
Macquarie also retains an ‘Outperform’ rating, highlighting that while earnings were largely in line, margins missed estimates. The brokerage believes:
- The recent margin decline is already priced in, creating an upside opportunity.
- MGL can achieve an 8% CAGR in volume growth from FY24-FY27E, providing long-term stability.
- Risks include rising input gas prices and potential cuts in APM gas allocation, which could impact profitability.
Conclusion
Brokerages remain broadly positive on MGL stock, with both CLSA and Macquarie maintaining ‘Outperform’ ratings. While margins remain a concern, volume growth prospects and tax benefits provide support for continued performance. Analysts will watch input costs and government policy changes to gauge the stock’s future trajectory.
Disclaimer
This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult a professional before making investment decisions. Business Upturn is not responsible for any gains or losses arising from investment activities related to this report.
