MS-Mahanagar Gas Ltd Natural Gas Costs Peak-20250723

MGL's CNG volume grew 8% YoY in F1Q26, ahead of industry growth of 5% (Apr-May), as new pipeline/station expansion led the market share gains from oil.Industrial volumes grew 26% YoY, supported by guaranteed customer discounts, vs.alternate fuels and expanded pipeline connectivity to large customers. EBITDA roseQoQ to Rs9.7/scm, aided by CNG price hikes in April (+Rs1.5/kg) and June (+Rs0.5/kg). Gas costs stayed flat QoQ.

Mumbai's energy and mobility needs - 125bn miles travelled annually - continue tosupport gas demand, with MGL gaining market share. We expect MGL's volumegrowth to more than double vs. the past decade, to 10% vs. 4.2% over F25-28e.Given our lower global gas prices expectations and an attractive valuation (tradingat 12.9x 1-yr forward P/E), we prefer MGL over IGL. For more, see here, here, andhere.