Morgan Stanley has initiated an ‘Overweight’ rating on Mahanagar Gas Ltd (MGL), setting a target price of ₹1,606, emphasizing the company’s pivotal role in Mumbai’s growing adoption of natural gas as a key energy source. The brokerage highlighted Mumbai’s rising travel and energy needs as drivers for increased demand, dubbing this shift as both “MGL and Mumbai’s Tesla-like moment” for gas adoption.
Morgan Stanley anticipates the global gas market to remain balanced in 2025 but expects an oversupplied scenario by 2027. While MGL sources 20% of its gas via LNG, which could result in lower margins, the brokerage sees structural volume growth as the key catalyst for the company’s re-rating. MGL’s proactive role in facilitating the adoption of natural gas positions it well for sustained long-term growth.
