Mahanagar Gas delivered impressive sequential growth with standalone net profit rising 46.83% quarter-on-quarter to ₹193.70 crore for Q1 FY27, up from ₹131.92 crore in the previous quarter. However, on a year-on-year basis, the company faced headwinds with net profit declining 39.39% from ₹319.56 crore in Q1 FY26, primarily due to a one-time revenue reversal in the prior year period. The company's earnings per share improved to ₹19.61 from ₹13.35 in the preceding quarter, while consolidated net profit attributable to owners stood at ₹193 crore. According to the company's unaudited financial results approved by the Board of Directors on July 30, 2026, the results were reviewed by the Audit Committee and subjected to a limited review by Deloitte Haskins & Sells LLP.
The company demonstrated strong operational performance with total gas sales volumes growing 7.0% year-on-year to 4.8 million standard cubic metres per day (mmscmd), driven by healthy CNG and PNG domestic volume growth of approximately 9.7% and 9.1% respectively. CNG volumes rose 5.55% quarter-on-quarter to 318.09 million SCM, surpassing analyst estimates of 309 million SCM, while domestic PNG volumes increased 4.13% to 56.67 million SCM. Industrial and commercial PNG volumes declined 8.90% to 58.94 million SCM due to reduced industrial demand. Total income rose to ₹2,629 crore from ₹2,314 crore year-on-year, indicating strong demand for the company's gas distribution services across its key markets.
EBITDA expanded significantly by 31.74% quarter-on-quarter to ₹342.98 crore, with the EBITDA margin improving to 14.46% from 12.69% in the previous quarter, demonstrating effective cost management despite input cost pressures. Total expenses increased 26% year-on-year to ₹2,371.71 crore, driven primarily by a significant rise in natural gas procurement costs, which climbed to ₹1,733.38 crore from ₹1,481.56 crore in the corresponding quarter last year. The company maintained disciplined cost control with employee benefits expense increasing to ₹46.34 crore and depreciation and amortization expenses at ₹108.55 crore. Finance costs remained low at ₹5.73 crore, while net revenue from operations grew 15.62% to ₹2,371.71 crore.
The company's adjusted EBITDA beat estimates at ₹3.4 billion versus ₹2.4 billion expected, with EBITDA per standard cubic metre improving to ₹7.9 from ₹6.2 in Q4 FY26 and ₹9.6 in Q1 FY26. This performance was driven by benefits of price hikes and minimal Brent-linked gas sourcing. Management increased FY27 capex guidance to ₹18 billion from ₹12 billion to accelerate infrastructure expansion for PNG domestic growth opportunities and investment towards CBG plant. The company maintains volume growth projections of 8.0% for FY27 and 11.2% for FY28, with analysts estimating EBITDA per standard cubic metre of ₹8.0 for FY27 and ₹8.4 for FY28.
Motilal Oswal recommended a 'Buy' rating on Mahanagar Gas with a target price of ₹1,560, significantly higher than Prabhudas Lilladher's ₹1,254 target. According to Motilal Oswal's research report dated August 1, 2026, MAHGL's 1QFY27 EBITDA/scm came in 43% above their estimate at ₹7.9/scm. The brokerage values the company at 13x Dec'27 P/E, resulting in the higher target price. The company continues its strategic expansion into electric mobility and renewable energy sectors, having invested ₹83.99 crore for a 26.13% equity stake in 3EV Industries Private Limited and ₹3.89 crore in FPEL Reliant Energy Private Limited for a 26% equity stake. Two significant legal matters remain pending, with the company contesting a ₹331.80 crore transportation tariff demand from GAIL (India) Limited and a GST liability demand of ₹54.33 crore.
