Motilal Oswal has maintained a BUY rating on Mahanagar Gas Limited with a target price of ₹1,390, implying a potential upside of 31% from current levels. According to reports from Moneycontrol, the brokerage's research report dated June 11, 2026 maintains its bullish outlook on the stock. The valuation is based on 14x December 2027 P/E ratio, resulting in the target price of ₹1,390. The stock currently trades with a market capitalisation of ₹10,492.18 crore and is classified as a BSE 500 constituent.
The stock closed 1.7% lower at ₹1,062.20 in the previous trading session on the BSE, as reported by ET Now. The stock has experienced correction of 13% over the last three and a half months, primarily due to elevated input gas costs and rupee depreciation. Brent crude prices increased to USD 102/bbl in 1QFY27 compared to USD 69/bbl in FY26, while Spot LNG prices rose to USD 18/mmbtu in 1QFY27 versus USD 12/mmbtu in FY26. Additionally, rupee depreciated 11% year-on-year in 1QFY27, contracting margins significantly. Despite recent volatility, the stock has shown mixed performance across different timeframes.
According to Moneycontrol reports, Motilal Oswal expects around 9% volume CAGR over FY26–28, supported by sustained CNG demand growth. The brokerage noted that price hikes and improved realisations in the I&C PNG segment are expected to cushion margin pressure. CNG demand is anticipated to sustain high single-digit growth, aided by vehicle additions and recovery in bus additions. The positive outlook is further supported by improving D-PNG conversion momentum (up 50% vs pre-war levels) and easing execution bottlenecks. The expectation of further INR 2-3/kg CNG price hikes (INR 5/kg CNG price hikes already taken post-war) and stronger I&C realizations should support earnings going forward.
As reported by Moneycontrol, at ~10.8x FY28E P/E (near mean -1 S.D.), valuations appear attractive, offering scope for re-rating as margin pressures ease. The stock's current valuation metrics reflect the challenging operating environment but also indicate potential for recovery. The combination of sustained CNG volume growth, improving operational metrics, and attractive valuations supports the brokerage's positive long-term outlook. The stock's performance over longer horizons has been relatively weak, being down 24.67% over 1 year and 25.19% over 2 years, but the recent correction presents an opportunity for investors seeking exposure to the growing CNG sector.
