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Mahanagar Gas Investment Call


Posted on 2019-02-19 in WEALTH NOTE RESEARCH

 

MAHANAGAR GAS LTD                                        CMP – 850                           5 YEAR TARGET – 1500

 

Image result for mahanagar gas logo

 

 

 

 

RATIOS

COMPANY VALUE

 

 

   SALES GROWTH 10 YEAR

14.2 %

   PROFIT GROWTH 10 YEAR

12.52 %

   AVERAGE RETURN ON EQUITY 5 YEAR

22.48 %

   AVERAGE RETURN ON ASSETS 5 YEAR

22.22 %

   OPERATING PROFIT MARGIN LAST YEAR

34.94 %

   NET PROFIT MARGIN LAST YEAR

21.40 %

DEBT TO EQUITY

0

INTEREST COVERAGE RATIO

2399

PROMOTER SHAREHOLDING

42.50 %

MARKET CAPITALISATION

8500 CRORES

 

 

 

 

 

 

VALUATION

RATIO

 

 

PRICE TO EARNING

16.40

 

 

INDUSTRY PE

21.19

 

              5 YEAR HISTORICAL PE

22.32

 

 

 

 

 

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.

 

 

 

Disclaimer : This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Wealth Note Investments has not independently verified all the information contained within this document. This should not be considered to be taken as an offer to sell or a solicitation to buy any security. Neither Wealth Note Investments nor its owners, or employees shall be liable for any loss or damage that may arise from or in connection with the use of this information. Please consult you financial advisor before taking any new trading or investment decision.

 







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