Stock To Buy: ICICI Direct Bullish On Oil & Gas Sector Midcap Stock, Gained Over 12% In 1 Week

ICICI Direct, a leading brokerage firm, has assigned a "Buy" to Mahanagar Gas Ltd. (MGL). The brokerage with a "Buy" call has estimated a target price of Rs 1,180/share for the stock. If you buy the stock at the current market price, it could give a return up to 20%.

Mahanagar Gas is an Oil & Gas sector company engaged in the Gas Distribution business. It is one of India's leading Natural Gas Distribution Companies in India. GAIL (India) Limited (Maharatna Company of Govt. of India) is the promoter of MGL. It is a midcap company having a market capitalisation of Rs 9,739 crore.

Stock Performance - CMP, 52 Week High/Low, Returns

The stock's current market price (CMP) is Rs 985.95/share, gained 8.72% as compared to its previous close of Rs 906.90 apiece. The stock, on 6 March 2023, hit its new 52 week high at Rs 989.50/share. The stock recorded its 52 week low on 20 June 2022 at Rs 665.80/share.

The stock surged 10.06% in the past 1 week. The stock has gained 11.79% in the past 1 month and 9.65% in the past 3 months, respectively. It gained 38.15% in the past 1 year. However, it has fallen 2.26% in the past 5 years, respectively.

MGL acquires private CGD player Unison Enviro...

According to the Brokerage, Mahanagar Gas has announced a share purchase agreement for acquiring 100% stake in private CGD player Unison Enviro Pvt Ltd for a cash consideration of Rs 531 crore. With this acquisition MGL would mark its entry into newer geographical areas such as Ratnagiri, Latur, Osmanabad, Chitradurga and Davanagere. This will enable MGL to scale up its CGD network, enabling the company to cater to a larger customer base.

Buy for a Target Price of Rs 1,180/share

According to the ICICI Direct, Inorganic entry into newer geographical areas marks a turning point for MGL, which was earlier limited to specific GAs. It would also help to bridge its valuation gap with other CGDs, due to probability of acquisition of newer growth areas. "The acquisition is of strategic importance to MGL. We maintain our BUY rating on the company with a target price of Rs 1180 i.e. ~14x P/E on FY25E EPS," the brokerage has said.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.