My Investment Idea No. 4: Mahanagar Gas Limited (MGL)

Long Term Investment Idea No. 4

Mahanagar Gas Limited (MGL)

1.    Face Value = Rs 10

2.    Equity       =  Rs 98.78 Cr

3.    Price:            Rs 1024

4.  One of the Beneficiary of the above rate cut in Gas Prices would be MAHANAGAR GAS LIMITED (MGL). MGL provides Piped Natural Gas (PNG) for  Domestic as well as Commercial/Industrial use in Mumbai and it's adjoining areas. It has 1 million domestic customers and a network of Piped Gas of about 5032 km. In addition, it sells Compresses Natural Gas (CNG) through its network of 223 CNG stations with more than 1288 dispensing points. MGL is expanding CNG network in new areas like KALYAN, DOMBIVALI, AMBERNATH, BADLAPUR, ULAHASNAGAR, BHIVANDI, PANVEL etc. It provides a cheaper mode of transportation..

5.    Results of MGL have been encouraging for past few years and Sales as well as profits have been rising steadily. Cut in Gas Prices would further add to its bottom line. It was listed at approx  Rs 500 in Aug 16. In Nov 17 it touched a high of Rs 1377 and slowly corrected to Rs 760 Sep 18. Presently it is trading at Rs 1024..

Promoters & Promoter Group Stake:

6.   GAIL:               32.50% stake

7.   Others:            10.00% stake

Other Share Holders:

8.    Mutual Funds:.                      5.96%

9.    Foreign Portfolio Investors:.  24.30%

10.  Insurance Companies:            5.7%

11.  President of India:        10% ( Central/ State Govt/ Governor Maharashtra)

Company's Result Overview:

Yearly:

                       Net Sales (NS)/ Net Profit (NP)/ Earning Per Share (EPS)

12.    2017:   Rs 2033.97 Cr/  Rs  393.42 Cr/ Rs 39.83

13.    2018:   Rs 2233.01 Cr/  Rs  477.87 Cr/ Rs 48.38

         Yearly YoY Growth in NP  =  21.46% 

14.    2019:   Rs 2791.07 Cr/  Rs  546.39 Cr/ Rs 55.31

         Yearly YoY Growth in NP  =  14.33% 

Quarterly:

15.   Jun 18 (FY 2019): Rs 619.34 Cr/  Rs 128.33 Cr/  Rs 12.99

16.   Jun 19 (FY 2020): Rs 757.47 Cr/  Rs 170.24 Cr/  Rs 17.23

        Quarterly YoY Growth in NP  =  32.65%

17.   Sep 18 (FY 2019): Rs 696.51 Cr/  Rs 136.29 Cr/  Rs 13.80

18.   Sep 19 (FY 2020): Rs 783.58 Cr/  Rs 270.62 Cr/  Rs 27.40

        Quarterly YoY Growth in NP  =   98.56%

Half Yearly:

19.   HY 2019: Rs 1315.85 Cr/  Rs 264.62 Cr/  Rs 26.89

20.   HY 2020: Rs 1541.08 Cr/  Rs 440.86 Cr/  Rs 44.63

        HY YoY Growth in NP            =   66.60%

21.   The Company is on Growth Trajectory. In my opinion this one looks like a candidate which can be accumulated slowly for long term on dips which should give decent returns in next 2-3 years as the business is only going to expand in years to come.

22.   Information provided above has been taken from internet and which may or may not be correct. Therefore, do your own research before investing in this stock.

Disclaimer:

The post written above is not to taken as a "Buy Recommendation by the author for MGL and no one should take a decision to buy this stock based on the information given in this Blog. This blog is written only to publish views of the author, which could be right or wrong. You must consult Financial Adviser before buying MGL.