MGL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | MGL | Market Cap | 10,344 Cr. | Current Price | 1,047 ₹ | High / Low | 1,587 ₹ |
| Stock P/E | 10.4 | Book Value | 629 ₹ | Dividend Yield | 2.87 % | ROCE | 22.9 % |
| ROE | 17.7 % | Face Value | 10.0 ₹ | DMA 50 | 1,123 ₹ | DMA 200 | 1,252 ₹ |
| Chg in FII Hold | 1.30 % | Chg in DII Hold | -2.06 % | PAT Qtr | 193 Cr. | PAT Prev Qtr | 320 Cr. |
| RSI | 39.6 | MACD | -20.8 | Volume | 57,919 | Avg Vol 1Wk | 2,47,156 |
| Low price | 1,019 ₹ | High price | 1,587 ₹ | PEG Ratio | 0.58 | Debt to equity | 0.03 |
| 52w Index | 4.98 % | Qtr Profit Var | -32.6 % | EPS | 100 ₹ | Industry PE | 19.8 |
📊 Financials: Mahanagar Gas Ltd (MGL) has a market cap of 10,344 Cr. with quarterly PAT at 193 Cr., down from 320 Cr. (-32.6% decline). ROE at 17.7% and ROCE at 22.9% reflect strong efficiency. Debt-to-equity ratio of 0.03 indicates an almost debt-free balance sheet. EPS stands at 100 ₹, supported by consistent profitability, though recent earnings show pressure.
💹 Valuation: Current P/E of 10.4 is well below the industry average of 19.8, suggesting undervaluation. P/B ratio is ~1.66 (1,047 ₹ / 629 ₹), which is reasonable. PEG ratio of 0.58 indicates earnings growth is attractively priced. Intrinsic value appears higher than current market price, making MGL appealing for long-term investors.
🏭 Business Model & Competitive Advantage: MGL operates in city gas distribution, supplying CNG and PNG to households, industries, and vehicles. Its competitive advantage lies in regulatory backing, strong distribution infrastructure, and steady demand for clean energy. However, profitability is sensitive to input gas prices and government policies.
📈 Entry Zone: With RSI at 39.6 (near oversold) and support around 1,020–1,050 ₹ (close to 52-week low of 1,019 ₹), accumulation in this zone is favorable. Current price at 1,047 ₹ offers a good entry point for long-term investors.
🕰️ Long-Term Holding Guidance: MGL is fundamentally strong, undervalued, and offers a healthy dividend yield (2.87%). Long-term holding is recommended given its strong return metrics, low debt, and steady demand outlook in clean energy distribution.
Positive
- Strong ROE (17.7%) and ROCE (22.9%).
- Debt-to-equity ratio at 0.03 shows near debt-free status.
- Attractive dividend yield of 2.87%.
- FII holdings increased by 1.30%, showing foreign investor confidence.
Limitation
- Quarterly PAT declined sharply (193 Cr. vs 320 Cr.).
- DII holdings decreased by 2.06%, showing reduced domestic confidence.
- Stock trading below DMA 50 and DMA 200, indicating weak momentum.
Company Negative News
- Recent earnings decline highlights margin pressure.
- Lower trading volumes compared to weekly average.
Company Positive News
- Strong fundamentals with low debt and high efficiency ratios.
- Dividend yield supports investor returns.
Industry
- City gas distribution sector benefits from rising demand for clean energy.
- Industry P/E at 19.8 highlights MGL’s undervaluation.
Conclusion
⚖️ MGL is a fundamentally strong, undervalued stock with robust return metrics and a debt-free balance sheet. Entry around 1,020–1,050 ₹ is favorable, and long-term holding is recommended given its strong dividend yield and growth potential in clean energy distribution.