MGL’s Q2 margins look good, but volume recovery holds key
Mumbai-based city gas distributor Mahanagar Gas Ltd’s (MGL) September quarter profit margins have been robust. Earnings before interest, tax, depreciation and amortization (Ebitda) per standard cubic meter stood at ₹11.60.
“MGL reported an all-time high Ebitda margin, which surged 17% year-on-year as the company cut opex by 53% year-on-year and did not pass on the declining input prices,” wrote Edelweiss Securities Ltd analysts in 17 November report.
Overall, MGL’s September quarter Ebitda came in at ₹221 crore, down 19% year-on-year but a whopping 176% jump from Q1. Shares of the company have gained by nearly 5% since results were announced last week. Even so, the MGL stock is around 25% away from its pre-covid high seen in January. Investors are concerned about the impact of open access in the city gas distribution sector. But, that’s not all.
