Mahanagar Gas shares hit 52-week high on Q4 results, dividend announcement; here are stock price targets

Shares of Mahanagar Gas hit fresh 52-week high in Tuesday's trade, as a solid set of March quarter results lift investor mood. Analysts like the state-run PSU on robust pricing power and sees it as steady volume growth story.  The March quarter volumes were lower than estimate but there was a beat on margin, said Motilal Oswal Securities.

JM Financial said Mahanagar Gas' Ebitda for the quarter was significantly higher than its estimate of Rs 290 crore and consensus estimate of Rs 310 crore due to sharper-than-expected jump in margin.

"However, volume was 3.3 per cent below our expectations. Ebitda margin surged more than expected to Rs 12.8/scm in 4QFY23 against JM Financia's estimate of Rs 9.3/scm (and against Rs 8.2/scm in 3QFY23); this was entirely due to lower-than-expected gas cost. We have raised FY24/25 PAT estimate by 7 per cent/11 per cent factoring in higher Ebitda margin at Rs 10.5-11/scm; target price has been revised to Rs 1,150," it said.

YES Securities finds the stock worth Rs 995. This brokerage said operating profit for Mahanagar Gas was in-line with its estimates, but above the Street estimates.

On Tuesday, the stock rose 7.49 per cent to settle at Rs 1,074.20 on BSE. The scrip hit a 52-week high of Rs 1,097.50 on the exchange during the session.

The company, meanwhile, has approved a final dividend of Rs 16 per equity share for FY23. This is in addition to the interim dividend of Rs 10 per equity share that it declared to all the eligible equity shareholders, as declared by the company board of directors at its meeting held on February 2.

Accordingly, the total dividend for the FY23 stood at Rs 26, implying a 33 per cent payout.

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