MGL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.0
| Stock Code | MGL | Market Cap | 9,891 Cr. | Current Price | 1,001 ₹ | High / Low | 1,587 ₹ |
| Stock P/E | 10.2 | Book Value | 629 ₹ | Dividend Yield | 3.00 % | ROCE | 22.9 % |
| ROE | 17.7 % | Face Value | 10.0 ₹ | DMA 50 | 1,104 ₹ | DMA 200 | 1,212 ₹ |
| Chg in FII Hold | 1.30 % | Chg in DII Hold | -2.06 % | PAT Qtr | 202 Cr. | PAT Prev Qtr | 193 Cr. |
| RSI | 31.6 | MACD | -30.1 | Volume | 10,51,072 | Avg Vol 1Wk | 7,83,360 |
| Low price | 988 ₹ | High price | 1,587 ₹ | PEG Ratio | 0.57 | Debt to equity | 0.03 |
| 52w Index | 2.17 % | Qtr Profit Var | -10.4 % | EPS | 97.9 ₹ | Industry PE | 14.4 |
📊 Financial Overview
- Revenue & Profitability: PAT rose from 193 Cr. to 202 Cr. QoQ, showing modest growth. EPS at 97.9 ₹ is strong relative to price.
- Margins & Returns: ROE at 17.7% and ROCE at 22.9% are healthy, reflecting efficient capital utilization.
- Debt & Liquidity: Debt-to-equity ratio of 0.03 indicates negligible leverage, enhancing financial stability.
- Cash Flow: Strong profitability supports reinvestment and dividend payouts.
💹 Valuation Metrics
- P/E Ratio: 10.2 vs Industry PE of 14.4 → Undervalued.
- P/B Ratio: ~1.59 (Price 1,001 ₹ / Book Value 629 ₹) → Attractive relative to assets.
- PEG Ratio: 0.57 → Indicates growth is priced reasonably.
- Intrinsic Value: Current price appears undervalued, offering upside potential.
🏢 Business Model & Competitive Advantage
Mahanagar Gas Ltd. (MGL) operates in city gas distribution, supplying CNG and PNG. Its strong market presence in Mumbai and surrounding regions, regulated pricing, and infrastructure investments provide a competitive edge. Rising demand for clean energy supports long-term growth.
📈 Entry Zone & Long-Term Guidance
Technically, RSI at 31.6 and negative MACD suggest oversold conditions. A good entry zone would be 980–1,000 ₹ (near recent lows). Long-term holding is advisable given strong fundamentals, undervaluation, and attractive dividend yield.
✅ Positive
- Undervalued P/E compared to industry.
- Strong ROE (17.7%) and ROCE (22.9%).
- Low debt-to-equity ratio (0.03).
- Dividend yield of 3% provides income support.
⚠️ Limitation
- Quarterly profit variation (-10.4%) indicates short-term weakness.
- DII holdings decreased (-2.06%), showing reduced domestic confidence.
- Stock trading below 50 DMA and 200 DMA, reflecting technical weakness.
📉 Company Negative News
- Quarterly profit growth slowed (-10.4% variation).
- DII reduced holdings significantly.
📈 Company Positive News
- EPS at 97.9 ₹ reflects strong profitability.
- FII holdings increased (+1.30%), showing foreign confidence.
🏭 Industry
The city gas distribution industry benefits from rising demand for clean energy and government support for CNG/PNG adoption. Industry PE at 14.4 highlights MGL’s undervaluation relative to peers.
🔎 Conclusion
MGL is fundamentally strong with attractive valuations, low debt, and healthy return ratios. Despite short-term profit weakness and reduced domestic sentiment, its long-term prospects remain solid. Accumulation near 980–1,000 ₹ is recommended for investors seeking stable returns and dividend income.