Stock To Buy: ICICI Securities Recommends Mid Cap PSU Gas Stock, TP Rs 1350

ICICI Securities has suggested investors to buy mid cap PSU stock Mahanagar Gas with target price of Rs 1350 apiece. Current market price of Mahanagar Gas (MGL) share on BSE is Rs 1039.10 per share with intraday rally of 0.46%.

If you buy Mahanagar Gas shares now, you can fetch potential return of 29.9%. MGL Shares soared 23% year-to-date and fell 7% in last 3 months. Check details below:

Mahanagar Gas Quarterly Results: The company for the quarter ended September 30, 2023 declared its net sales at Rs 1728.94 crore, up 10.64% as against Rs 1562.66 crore declared in September 20222. Its quarterly net profit for September 2023 declared at Rs 338.50 crore, up 106.44% YoY as against Rs 163.97 crore in September 2022. The PSU company reported its EBITDA at Rs 522.59 crore in September 2023, up 87.43% from Rs 278.82 crore in September 2022.

Mahanagar Gas Stock Performance & Return: Last trading price of Mahanagar Gas share on BSE is Rs 1039.10 per share on BSE as on November 3, 2023. The stock's 52-week high price is Rs 1151.85 per share and 52-week low price is Rs 811.05 per share, respectively. The company has a market capitalisation of Rs 10,264.00 crore. Mahanagar Gas stock offered return of 17% in last 1-year, gained 3% in last 2-years, and offered return of 28% in last 3-years.

Mahanagar Gas Valuation: According to ICICI Securities, "We value MGL on DCF methodology, using a WACC of 10.9%, DER of 35%, long-term EBITDA assumption of INR 12/scm and terminal growth rate of 1.6%. In the long term, we build in muted volume growth beyond FY26E as well as flattish margins, given our caution around longer-term growth expectations. Our DCF value delivers a target price of INR 1,350, ~37% upside from CMP. Maintain BUY."

Disclaimer: The stock has been picked from the brokerage report of ICICI Securities. 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 check with certified experts before taking any investment decision.