Mahanagar Gas Investment Call
MAHANAGAR GAS LTD CMP – 850 5 YEAR TARGET – 1500
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RATIOS |
COMPANY VALUE |
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• SALES GROWTH 10 YEAR |
14.2 % |
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• PROFIT GROWTH 10 YEAR |
12.52 % |
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• AVERAGE RETURN ON EQUITY 5 YEAR |
22.48 % |
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• AVERAGE RETURN ON ASSETS 5 YEAR |
22.22 % |
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• OPERATING PROFIT MARGIN LAST YEAR |
34.94 % |
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• NET PROFIT MARGIN LAST YEAR |
21.40 % |
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DEBT TO EQUITY |
0 |
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INTEREST COVERAGE RATIO |
2399 |
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PROMOTER SHAREHOLDING |
42.50 % |
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MARKET CAPITALISATION |
8500 CRORES |
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VALUATION |
RATIO |
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PRICE TO EARNING |
16.40 |
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INDUSTRY PE |
21.19 |
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5 YEAR HISTORICAL PE |
22.32 |
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Mahanagar Gas is one of the leading natural gas distribution companies in India. Established in 1995, it is a joint venture between GAIL and BG Group (UK).
The company specialises in trade and distribution of natural gas which accounts for 99 percent of its total revenue.
The rest of the revenue comes from sales of other equipment like pipes and cables.
Currently, natural gas business is looking as a promising sector since there is high awareness about cleaner sources of energy. The governments drive to promote cleaner energy sources also pushes the agenda of environmental protection.
We expect the company to grow at an average annual growth rate of 18% and we expect the share price to rise to a level of ₹ 1500 by FY 2024.
The stock is also valued attractively at 16 PE, which makes it a good buy for the long term.
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