CNG, PNG Prices in Mumbai Today: In a major relief, Mahanagar Gas announced a cut in the prices of kitchen fuel Piped Natural Gas (PNG) and automobile fuel Compressed Natural Gas (CNG). The city gas distributor cut the prices of CNG, PNG, following an increase in allocation of domestically produced natural gas from the government. The price of PNG has been reduced by Rs 4 per standard cubic metre to Rs 48.50 per SCM, while that of CNG by Rs 6 a kilogram to Rs 80 per kg.
In the case of PNG users, the savings will be 18 per cent when compared with the most used alternative Liquified Petroleum Gas (LPG), it said.
In the case of PNG users, the savings will be 18 per cent when compared with the most used alternative Liquified Petroleum Gas (LPG), it said.
“The revised price of CNG offers attractive savings of about 48 per cent compared to petrol at current price level in Mumbai. MGL’s Domestic PNG offers around 18 per cent saving as compared to current MRP of Domestic LPG while delivering unmatched convenience, safety, reliability, and environmental friendliness to consumers,” the company said in its statement.
MGL had in the first week of August, increased prices for CNG and PNG by a similar amount, which was the sixth hike since April this year.
In August 2, 2022, MGL had increased the retail price of CNG and PNG in the Mumbai Metropolitan Region by Rs 6/kg and Rs 4/SCM respectively. After that rickshaw and taxi unions of the city demanded a hike in the fare.
Welcoming the decision, Thampy Kurian, leader of one of the prominent rickshaw unions of the city said, “It’s good for rickshaw drivers as well as for Mumbaikars, but we still need a fare hike of Rs 3 in the minimum fare.” Currently, the minimum fare of the rikshaw is Rs 21.
The minimum fare for taxis and autos has remained unchanged since a Rs 3 hike in February 2021. The minimum fare for auto which was Rs 18, increased to Rs 21 while the base fare for the kaali peeli taxis was increased to Rs 25 from Rs 22 in August after the last price hike.
In the Mumbai Metropolitan Region, there are over 8 lakh CNG consumers, including several auto-taxi and bus owners and more than 3 lakh private car users who opted for the green fuel as it was cheaper than petrol and diesel besides being environment-friendly. There are also 18 lakh households in MMR that use PNG.
Commenting on the earnings, ICICI Securities said that Mahanagar Gas reported its Q1FY23 EBITDA at Rs 286 crore vs our estimate of Rs 300 crore. The marginal miss was driven by weaker than estimated margins even as volumes surprised positively for the quarter, it noted. Management has attributed the dip to continued pressure of higher spot LNG costs and higher opex, stated ICICI.
It, however, also noted that both gross margin/scm and EBITDA/scm of grew 8.6 per cent QoQ and 20.5 percent QoQ, respectively. This implies the impact of aggressive price increases taken over the past few months, and tie-up(s) of term LNG volumes and premium domestic gas, it pointed out. This should help sustain margins at Rs 14/scm (gross) and Rs 9.5/scm (EBITDA) for FY23E-FY24E, despite the specter of rising LNG and pooled gas costs, added ICICI.
Post the results, domestic brokerage house ICICI Securities upgraded the stock to ‘buy’ from ‘add’ with a target price of Rs 980 per share. This indicates a potential upside of 25 percent for the stock.
According to the brokerage, the stock’s risk-reward ratio is strongly tilted in favour of reward on the back of ahead-of-estimated volume growth and abysmal valuations, coupled with robust return ratios.
“With the stock price weakness seen in past six months and favourable multiples, we turn bullish on MGL for next 12-18 months. We estimate an EPS CAGR of 22 percent over FY22-FY24E, supported by a volume CAGR of 10 percent, gross margins of Rs 14.8/scm (standard cubic metre) and EBITDA/scm of Rs 9.7/scm. Longer-term growth beyond FY25E-FY26E does seem challenging, but current valuation gaps and growth prospects are worth looking at, in our view,” explained the brokerage.
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