This PSU Gas company, which is into supplying natural gas for Mumbai and the Raigad District in Maharashtra in focus after the company entered a Share Subscription and Shareholder’s Agreement with International Battery Company (U.S).
Price Movement
In Friday’s trading session, Mahanagar Gas Limited stock was trading at 2 percent higher in early day trade after entering a Share Subscription and Shareholder’s Agreement with International Battery Company (U.S). The stock has delivered a return of around 34.81 percent in the past year and outperformed Nifty in the same period. The stock reiterated from the day’s high of Rs. 1463 and was trading at Rs. 1413 which is 1.68 percent down from the previous closing price of Rs. 1437.20 per share.
What happened
Mahanagar Gas signed a share subscription and a Shareholding Agreement with International Battery Company (US) on 7th November 2024 through which both the companies would invest in International Battery Company India Private Limited to form a joint venture company, which is a 100% subsidiary of IBC US.
This is under the non-binding term sheet signed between the parties on 7th October, 2024. The MGL would invest Rs. 230 crores in IBC India. The shareholding in JV of MGL and IBC India would be 44 percent and 56 percent respectively. As per the agreement, the company will not hold a stake of less than 40 percent in IBC India.
Management Commentary
The MD of MGL, Mr. Ashu Shinghal said that MGL has established itself as a leading CGD company and key player in India’s energy sector. Its investments in LNG retail, CBG, and electric vehicle manufacturing align with its goal of a cleaner future. Partnering with IBC US, MGL will set up a gigafactory in India for Indigenous battery cell manufacturing, and improve local sourcing which supports the Make in India initiative.
The CEO of IBC, Inc., Mr. Priyadarshi Panda said MGL partners with IBC to establish a gigafactory in India for indigenous battery cell manufacturing, improving local supply and supporting the Make in India initiative while addressing energy independence.
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Financial Performance
Their Q2FY25 results show revenue from operations of Rs. 1,712 crore which increased by 8.97 percent year on year, from Rs. 1,571 crore in Q2FY24 and a 7.67 percent increase from Rs. 1,590 crore in Q1FY25. Their net profit decreased by 16.27 percent year on year, from Rs. 338 crores in Q2FY24 to Rs. 283 crores in Q2FY25. Quarterly, the profits were down 0.70 percent from Rs. 285 crore.
The return on equity in FY24 stood at 27.79 percent increasing from 20.44 percent a year ago. The debt-to-equity ratio was 0.3 times and is consistent from FY23. However, the return on capital employed has stood at 36.27 percent which has improved from 26.59 percent in FY23.
Revenue Segment
According to the company’s September 2024 quarterly report, they considered revenue from CNG which contributed around 69.12 percent, PNG – 30.30 percent, LNG – 0.13 percent, Traded Items – 0.10 percent, and other operating revenue – 0.31 percent.
Shareholding Pattern
As of September 2024, the shareholding pattern includes promoters holding a major share of 32.50 percent stake in Mahanagar Gas, Foreign Institutional Investors (FII) holding around 34.20 percent, Domestic Institutional investors (DII) standing at 15.46 percent, Government holding 10 percent, and public holdings standing at 7.84 percent.
About the company
Mahanagar Gas Limited is a natural gas distribution company in India that serves cities like Thane, Mumbai, and Raigad. They distribute compressed natural gas for vehicles and piped natural gas for commercial, residential, and industrial use.
They focus on providing clean and efficient energy solutions, improving energy security while reducing pollution.
Written by Santhosh S
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