Sharekhan Picks Mid Cap CGD Stock To Buy, Target Price Rs 1285 Apiece

Sharekhan has recommended investors to buy mid cap stock from Oil & Gas sector, Mahanagar Gas Ltd with target price of Rs 1285 per share. Last trading price of Mahanagar Gas share is Rs 1050.00 per share. If you buy Mahanagar Gas share at the last trading price of Rs 1050 apiece, you can fetch potential return of 22%. Check details below:

Mahanagar Gas Stock Performance & Return: Last trading price of Mahanagar Gas stock is Rs 1050.00 apiece on BSE with intraday gain of 1.50%. Its 52-week high price is Rs 1104.80 apiece and 52-week low price is Rs 725.25 apiece, respectively. The company has a market capitalisation of Rs 10,371.67 crore. In last 1-year, Mahanagar Gas shares offered investors return of 38%, declined 7% in last 2-years, and gave return of 27% in last 5-years.

Mahanagar Gas Valuation: According to Sharekhan, "MGL is the cheapest CGD stock with an attractive valuation of 11x/10x FY24E/FY25E EPS. Hence, we maintain a Buy rating on MGL with an unchanged PT of Rs. 1,285."

Supportive government policies to cap domestic gas prices would remove the high gas cost overhang and drive margin/ volume recovery for CGDs over FY24-25. We expect MGL's PAT to clock a 13% CAGR over FY23-25E, with RoE/RoCE staying healthy at 21%/26%, added the analyst.

Mahanagar Gas About: MGL is a dominant CGD player in and around Mumbai with CNG/PNG sales volumes of 3.4 mmscmd currently. MGL derives 71% of its volumes from CNG, 15% from domestic PNG, and the remaining from commercial/ industrial PNG. The company sources its >90% of its gas requirement for CNG and domestic PNG from lowcost domestic gas. The company has 313 CNG stations, 2.17 million PNG customers, and a pipeline network of 6,535 km.

Disclaimer: The stock has been picked from the brokerage report of Sharekhan. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.