2025-06-07-花旗集团-马哈拉施特拉天然气公司（MGAS）_孟买燃气（MGAS.BO）_分析师会议要点-强劲的有机增长指引+探索无机增长机会；买入_12页_417kb

Citi Research Summary: Mahanagar Gas (MGAS.BO)

Key Takeaways from Analyst Meet

• Volume Growth Guidance: Management now expects a 10%+ compound annual growth rate (CAGR) for volumes over the next 2-3 years, surpassing the 5% CAGR from FY15-24 and impressive given the high FY25 base of 12% growth. This is driven by expansion in CNG infrastructure (e.g., adding mega stations in Mumbai) and targeted interventions in the industrial segment.

• Growth Drivers:

  • Increased pace of CNG infrastructure creation, leading to higher demand (95 new stations added in the last 3 years).
  • Promotions and new OEM launches boosting CNG vehicle sales and increasing the share of commercial vehicles.
  • Facilitation of gas switching for small commercial customers and the Bombay High Court's directive to phase out petrol/diesel vehicles in Mumbai.

Valuation

• Target Price: Rs1,700, based on a March 2027 DCF model that values core operations at Rs1,634 and adds Rs68 from option value related to the Unison Enviro acquisition.
• Current Price: Rs1,331, with an expected 27.7% price return over the forecast period.
• Expected Returns: Total return of 30.0%, dividend yield of 2.3%.

Gas Sourcing and Margins

• Gas Mix: C.55% oil-linked gas, providing comfort for EBITDA margin guidance of Rs9-11/scm (forecasted Rs10/scm for FY26-28).
• Margin Sensitivity: EBITDA margins could change with oil price fluctuations (±$5/bbl vs. base of $65/bbl).

Inorganic Opportunities

• Exploring M&A to expand geographic footprint, consistent with the long-held view due to reduced APM allocation and regulatory pressures for consolidation.
• Current efforts include completing the Unison Enviro merger and pursuing diversification into CBG (MoU with BMC), LNG retail, EVs, and battery manufacturing, despite premature assessment of upsides.

Risks

• Potential downsides: Higher gas costs, oil price reductions delaying alternatives, EV disruption, regulatory actions impacting margins or competition.

Analyst Certification and Recommendation

• Maintain Buy rating, as per CITI's analysis, reinforcing the company's position in the CGD sector.