Mahanagar Gas Limited

Utilities — Utilities - Regulated Gas · NSE

₹1,056.40+₹9.00 (+0.86%)

DalalBaazaar Score

52 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, short-term liabilities exceed short-term assets, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, though profits are falling even as sales grow. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:44 pm

Understanding the Business

Company site ↗

The 60-second version of Mahanagar Gas Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Mahanagar Gas Limited operates as a natural gas distribution company in India.

IndustryUtilities - Regulated Gas

SectorUtilities

Employees729

Annual revenue₹8,207 Cr

How does it make money?

Turns over ₹8,207 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹18 left at the operating level before interest, tax and depreciation. Each of its 729 employees supports ₹11.26 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹11.26 Cr

Who are its competitors?

The closest listed comparisons in its industry are NTPC LTD, POWER GRID CORP. LTD., TATA POWER CO LTD, ADANI POWER LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 16.5% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE15.8%

What is the outlook?

25 analysts covering the stock expect revenue to grow about 7.1% and earnings to grow about 19.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+7.1%

Est. earnings growth+19.4%

Analysts25

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +31% while net margin moved -19% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+31%

Margin effect-19%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

• Revenue CAGR of 9.3% is steady
✗ Profit CAGR of only 2.1%
✗ Profit is compounding slower than revenue — margins are being squeezed as the business grows
✗ Profit fell 39.3% in the latest year

Quality vs. Valuation

Company Quality

51/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

61/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

14.6x

3Y Median

12.1x

40 monthly readings · mean 12.8x · range 8.8x–23.4x

Sector Median

20.6x

median of 4 sector peers

⚠️Current valuation is approximately 20% above its 3y median of 12.1x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

🟢Against its sector it trades 29% below the peer median of 20.6x.

vs. its own history

Expensive

12.1x median over 40 months · +20%

vs. sector peers

Cheap

20.6x median of 4 peers · -29%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.1x

PEG

6.91

What's Good / What's Bad

🟢 What's Going Well1

Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 20.1% to 18.3% over 3 years.
Return on equity is falling
ROE has dropped from 19.1% to 13.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 23.8% to 16.5% — often a sign of competition or overexpansion.

Red Flags

5 items require attention · 2 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 94% over 3 years, from ₹115 Cr to ₹223 Cr.
🔴High leverageFinancial
Debt/Equity of 3.46x — earnings must service borrowings before shareholders see anything.
🟡Receivables growing faster than salesFinancial
Receivables up 56% against revenue up 31% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 85% against revenue up 31% — stock may not be moving.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.94 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 29% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 20.1% to 18.3%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Leverage amplifies any setback
Debt/Equity of 3.46x. Interest is payable whether or not the business has a good year.
Sales are being booked faster than collected
Receivables are up 56% against revenue up 31%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
The price already assumes success
The stock trades 20% above its own median multiple. At this level the business has to deliver just to stand still, and a stumble is repriced twice — lower earnings on a lower multiple.
Returns on shareholder capital are falling
ROE has dropped from 19.1% to 13.1%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 16%✓ 18.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 7% a year✓ 9.3% CAGR
Latest reported year was 13.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹87 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 13%✓ 16.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹10,435 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.6x

Cheap

Cheap against the generic band

P/B Ratio

1.62x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹72.42

Profitable

Profitable on a per-share basis

ROE

13.1%

Moderate

Moderate capital efficiency

ROCE

16.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

3.46x

High

High leverage

Revenue Growth (YoY)

13.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-39.3%

Falling

Profits are shrinking

Dividend Yield

3.41%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹87 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

11.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

9.9%

Average

Average margins

Net Margin

8.4%

Average

Average bottom-line conversion

Current Ratio

0.94

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.73

Defensive

Steadier than the market

52W Range Position

38%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1053.2 / 1083.6

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

42.2

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹6,277 Cr	₹6,267 Cr	₹7,228 Cr	₹8,207 Cr	+9.3%
EBITDA	₹1,261 Cr	₹1,926 Cr	₹1,651 Cr	₹1,503 Cr	+6.0%
EBITDA Margin	20.1%	30.7%	22.8%	18.3%	—
PAT (Net Profit)	₹790 Cr	₹1,285 Cr	₹1,040 Cr	₹841 Cr	+2.1%
EPS	₹79.98	₹130.06	₹105.31	₹85.15	+2.1%
ROE	19.1%	25.0%	17.7%	13.1%	—
ROCE	23.8%	31.4%	21.5%	16.5%	—
Total Debt	₹115 Cr	₹141 Cr	₹201 Cr	₹223 Cr	+24.8%
Free Cash Flow	₹256 Cr	₹785 Cr	₹223 Cr	₹87 Cr	-30.3%

🟢 Revenue has grown at 9.3% a year over 3 years.

🟢 EBITDA has grown at 6.0% a year over 3 years.

🔴 EBITDA Margin has fallen from 20.1% to 18.3% over 3 years (-1.8 pts).

🟢 PAT (Net Profit) has grown at 2.1% a year over 3 years.

🟢 EPS has grown at 2.1% a year over 3 years.

🔴 ROE has fallen from 19.1% to 13.1% over 3 years (-6.0 pts).

🔴 ROCE has fallen from 23.8% to 16.5% over 3 years (-7.4 pts).

🔴 Total Debt has grown at 24.8% a year over 3 years.

🔴 Free Cash Flow has shrunk at 30.3% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹8,981 Cr

Total Liabilities

₹2,540 Cr

Cash & Equivalents

₹57 Cr

Operating Cash Flow

₹1,162 Cr

Capex

-₹1,076 Cr

Shareholding (proxy)

Institutional Holding

35.5%

Insider Holding

42.5%

Corporate Actions

Next Earnings

29 Oct 2026

Dividend Rate

₹36

Ex-Dividend Date

18 Aug 2026

Analyst Consensus

Recommendations

24 Buy · 3 Hold · 3 Sell

Target Price (Mean)

₹1,301.73

+23.2% vs CMP

Target Range

₹1,005 – ₹1,665

Peer Comparison

Company	P/E	ROE
NTPC LTD	11.0x	13.7%
POWER GRID CORP. LTD.	14.6x	15.8%
TATA POWER CO LTD	29.3x	9.8%
ADANI POWER LTD	26.5x	21.9%

Recent News

1 positive2 mixed3 general

Mahanagar Gas Share Price - Live NSE: MGL Stock Price & Chart

Upstox, 16 Oct

MGL Outlook for the Week

Equitypandit, 09 Oct

Three Days Left Until Mahanagar Gas Limited (NSE:MGL) Trades Ex-Dividend

Simply Wall Street, 14 AugCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Higher gas realisations help Mahanagar Gas beat Q1 estimates; Nomura keeps Buy

Moneycontrol.com, 31 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Stock to buy today: Mahanagar Gas (₹1,185.15) – BUY

BusinessLine, 17 Jun

Mahanagar Gas, Indraprastha Gas Share Price Jump Over 3% In Trade. Here's Why

NDTV Profit, 19 AugPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 2 high-severity red flags sit above this conclusion and should be read first.

All 5 tripwires holding · see Key things to watch ↑