Mahanagar Gas (MGL) Q4 19/20 earnings summary

Executive summary

• FY20 revenue rose 6.79% YoY to ₹3,264.49 crore; EBITDA grew 18.90% to ₹1,052.84 crore and PAT increased 45.23% to ₹793.51 crore, a record profit.

• Annual sales volumes grew just 0.1% as COVID-19 lockdown effects in March offset earlier growth; the outlook flagged continued pressure in H1 FY21.

Financial highlights

• Revenue from operations was ₹3,264.49 crore versus ₹3,056.79 crore in FY19; PBT rose 17.52% to ₹983.54 crore.

• EBITDA increased 18.90% to ₹1,052.84 crore; EBITDA margin expanded 370 bps to 35.42% from 31.72%.

• PAT rose 45.23% to ₹793.51 crore; PAT margin improved to 26.70% from 19.58%, and EPS increased to ₹80.33 from ₹55.31.

• Profit growth reflected lower gas prices, efficient sourcing and operations, and a lower tax rate; FY20 tax rate was 25.17% versus 34.94% in FY19.

Outlook and guidance

• COVID-19 was expected to weigh on FY21 earnings, particularly in H1; recovery in activity and gas demand was anticipated in H2 FY21.

• Over four years, plans target 11 lakh additional households and 400 CNG stations, with steel pipeline expanded to ~600 km and PE pipeline to over 7,600 km.

• Existing Mumbai-area and Raigad license areas remain the priority; expansion into underpenetrated locations and organic or inorganic growth opportunities are also being pursued.