India's Mahanagar Gas gains on analysts' optimism on growth despite Q1 profit fall

Indraprastha Gas

26/07/2024 07:32

** Shares of Mahanagar Gas  MGAS.NS  climb ~3% to 1,797.30
rupees
    ** City gas distributor reported 23% drop in Q1 consol net
profit but Jefferies analysts say MGAS' volume growth "superior"
compared to peers such as Indraprastha Gas  IGAS.NS  
    ** Says operating profit was ahead of its estimates, due to
lower gas costs and rise in overall volumes
    ** Jefferies maintains "buy"; raises PT to 1,990 rupees, a
Street-high per LSEG, from 1,600 rupees, citing valuation
discount to IGAS
    ** Brokerage, however, flags margin pressure due to fall in
administered price mechanism, which is the gas price set by the
government 
    ** Avg rating on MGAS at "buy", while IGAS rated "hold" -
LSEG data
    ** MGAS up ~50% YTD vs IGAS' ~28% climb
    

 (Reporting by Kashish Tandon in Bengaluru)
 ((kashish.tandon@thomsonreuters.com))