Mahanagar Gas share pops 6% as Morgan Stanley initiates with 'Overweight'

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Morgan Stanley on Mahanagar Gas: Natural gas distribution company Mahanagar Gas Limited (MGL) shares were buzzing in trade on Tuesday, January 14, 2025, as the scrip surged up to 5.62 per cent to hit an intraday high of Rs 1,297 apiece. 

 

Mahanagar Gas shares surged following reports that Morgan Stanley, a New York-based brokerage firm, initiated coverage with an 'Overweight' rating. The firm has set a target price of Rs 1,606 per share, indicating a potential upside of 30.78 per cent from the previous session's closing price of Rs 1,227.95.

 

Morgan Stanley highlighted Mumbai's continuous expansion and increasing demand for travel and energy. The report stressed that natural gas is set to become the city's fuel of the future, with Mahanagar Gas playing a key role in driving its adoption.

 

The brokerage anticipates a balanced global gas market in 2025, with potential oversupply by 2027. It also noted that 20 per cent of Mahanagar Gas's supply is linked to LNG, the report added.

 

Mahanagar Gas financial performance 

Mahanagar Gas posted a 16.5 per cent drop in the September quarter of financial year 2025 (Q2FY25) profit due to rise in fuel costs.

 

The company’s profit after tax fell to Rs 283 crore in the Q2FY25, as against Rs 339 crore a year ago (Q2FY24).

 

The gas distributor’s revenue from operations jumped 8.6 per cent year-on-year (Y-o-Y) to Rs 1,877 crore, while total expenses climbed 18 per cent annually to Rs 1,555 crore, owing to a 20 per cent increase in natural gas costs.

 

About Mahanagar Gas 

 

Mahanagar Gas, established in 1995 with GAIL (India) Ltd. as its promoter, is a leading natural gas distribution company in India. Recognised for pioneering the natural gas distribution network in Mumbai and its surrounding regions, MGL is committed to delivering safe, efficient, and reliable energy while prioritising environmental sustainability and consumer satisfaction. 

 

Additionally, Mahanagar Gas boasts a workforce of over 500 technical and managerial professionals. Its City Gas Distribution (CGD) network is meticulously designed, operated, and maintained by in-house experts adhering to world-class technical and safety standards.

 

The market capitalisation of Mahanagar Gas is Rs 12,779.38 crore, according to BSE. The company falls under the BSE 500 category. 

 

At 11:33 AM, Mahanagar Gas shares were trading 5.36 per cent higher at Rs 1,293.75. In comparison, BSE Sensex was trading 0.57 per cent higher at 76,763.37 levels.