Mahanagar Gas Shares in Focus; Secures 26% Increase in APM Gas Allocation

Mahanagar Gas announced a 26% increase in APM gas allocation from GAIL, raising CNG supply from 37% to 51%. This significant change is expected to positively impact profitability starting January 16, 2025, the company said in a press release on the stock exchanges.

Increased CNG Allocation to Boost Profitability

With this increase, MGL’s allocation for Compressed Natural Gas (CNG) will rise from 37% to 51%, enabling the company to better meet rising demand. This change is expected to have a positive impact on the company’s profitability, enhancing supply capabilities and strengthening its market position.

MGL anticipates that this move will improve financial performance in the near term, benefiting both the company and its stakeholders.

Q2 FY25 Financial Highlights

Mahanagar Gas Ltd. (MGL) reported a 16.5% year-on-year decline in net profit for Q2 FY25, with profit after tax falling to ₹283 crore, compared to ₹339 crore in the same quarter last year. The company saw a growth in revenue from operations, which increased by 8.6% to ₹1,877 crore, driven by higher sales volumes.

However, total expenses rose by 18% to ₹1,555 crore, primarily due to a 20% surge in natural gas costs, which impacted profitability. On a sequential basis, MGL’s net profit fell by 2% from ₹288.8 crore in the previous quarter.

The company’s sales volume grew by 5.9% to 371.9 million standard cubic metres, with strong performance from the PNG-industrial segment, which saw a 17% rise in sales volume. Despite challenges with rising operational costs, MGL’s total sales volumes in the CNG segment rose by 5.22%.

Additionally, MGL’s board approved a merger scheme with its wholly-owned subsidiary, Unison Enviro Pvt. Ltd, aimed at generating synergies and optimising costs.

Share Price Performance

Mahanagar Gas share price traded 0.92% lower at ₹1,258.95 at 10:00 AM on the NSE, after opening at ₹1,295, higher than its previous close of ₹1,270.65. Meanwhile, GAIL shares were down 2.02%, trading at ₹179.33.

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