Citi
Brokerage firm Citi has a “buy” rating on the stock, with a target price of ₹1,700 per share. The stock ended the previous session at ₹1,329.6 apiece.
Citi listed takeaways from the MGL management meet, saying it is now guiding for a healthy over 10% volume compound annual growth rate (CAGR) over the next two to three years, notwithstanding a high financial year 2025 base, and that the company is actively scouting for M&A opportunities.
Citi said it liked that the management’s focus is on volume growth by increasing the pace of CNG infrastructure expansion and making targeted interventions in the industrial segment. It also likes that around 55% share of oil-linked gas in MGL’s supply portfolio, which should provide comfort and enable the company to comfortably meet the 9-11/scm earnings before interest, taxes, depreciation and amortisation (EBITDA) margin guidance.
Citi said it is encouraged by the management’s optimistic outlook, especially given solid execution over the last two years.
JPMorgan
The brokerage has a “neutral” rating on MGL with a target price of ₹1,360 per share.
It said that during the analyst meeting, the company highlighted two key strategic choices — specific efforts to drive volumes, even at the cost of margin and a focus on M&A opportunities for inorganic growth.
JPMorgan said margin can come under pressure due to creeping gas cost increases as well, limiting near-term earnings.
Nuvama
Nuvama has a “reduce” rating on the MGL stock with a target price of ₹1,224 per share.
Nuvama said MGL expects healthy volume growth to continue on expansion of infrastructure, targeted marketing, CNG competitiveness and pick-up in LNG fuelling.
It said that the sourcing mix is expected to worsen as the share of new well/well intervention gas (NWG), priced at a 20% premium to the administered price mechanism (APM), will rise on reclassification of the latter, which is 35% at the moment.
Nuvama also stated that sector consolidation is likely due to a potential levy on penalties for non-completion of the minimum work programme (MWP) and a lower industry margin resulting from a fall in APM allocation.
To conclude, it said MGL is open to inorganic growth with a net cash balance sheet.
Of the 32 analysts that have coverage on the stock, 20 have a “buy” rating, while six have “hold” and “sell” ratings each.
Shares of MGL gained nearly 5.7% to hit an intraday high of ₹1,404.90 per share. The stock has gained 8.5% this year, so far.
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