Mahanagar Gas Ltd - Q4 FY21 first cut - YES Securities

- MAHGL -4QFY21-Earnings Update-Below Estimates: MAHGL's reported 4QFY21 operating profit at Rs 3.16bn (+30% YoY; -0.2% QoQ), stood below our (YSEC: 3.6bn) and street estimates (Rs 3.3bn). The miss on our estimates stemmed from a) lower than estimated gas sales at 2.89mmscmd (est: 3.17) and b) higher than expected cost of spot LNG

Key Highlights

4QFY21 Profitability: Reported EBITDA and PAT stood at Rs 3.16bn (+30% YoY; -0.2% QoQ) and Rs 2.13bn (+28% YoY; -2% QoQ). The YoY growth stemmed from weaker base quarter on account of strict lockdown in Mar'20. The sequential impact on profitability stemmed from 10% QoQ higher other operating expenses.

FY21 profitability: The EBITDA and PAT stood at Rs 9.3bn (-11.3% YoY) and Rs 6.2bn (-22% YoY). The YoY lower profitability stemmed primarily from 25% YoY lower gas sales.

Gross Margin: The gross margin for the 4Q stood sequentially flat at Rs 17.7/scm, as MAHGL seemingly passed on the higher LNG prices to the consumers.

EBITDA per unit: The EBITDA per unit at Rs 12.15/scm stood sequentially 2.2% weaker on higher operating expense. The per unit EBITDA for FY21 stood 13% YoY higher at Rs 11/scm

Gas Sales: The total gas sales during the quarter stood at 2.89mmscmd (CNG: 2.02mmscmd; PNG 0.87), which is about 4% higher YoY and QoQ. The annual gas sales at 2.21mmscmd (CNG: 1.42mmsmcd & PNG: 0.8mmscmd) stood 25% lower YoY primarily on weaker CNG sales.

We have a BUY rating on MAHGL with a TP of Rs 1310/sh

MAHGL would host a conference call on 25th May at 4pm to discuss 4Q & FY21 earnings.

Shares of Mahanagar Gas Ltd was last trading in BSE at Rs.1147 as compared to the previous close of Rs. 1141.1. The total number of shares traded during the day was 120063 in over 7124 trades.

The stock hit an intraday high of Rs. 1196 and intraday low of 1100. The net turnover during the day was Rs. 140566920.

Source : Equity Bulls

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