Mahanagar Gas Ltd - a natural monopoly


(Prash) #81

As I see, adding new customers or connections only will increase the top line. How is this number growing.?
Also any commentary from management on estimates for new connections over next 12 months? How much more scope for expansion in Mumbai?

Selling price increase due to increase petrol/diesel price, will it result in any bottom line improvement?


(Sandeep) #82

Please participate in the concall scheduled for tomorrow regarding the details on the number of customers added etc.

http://www.bseindia.com/xml-data/corpfiling/AttachHis/908dcd9b-4e92-4f8f-bddd-c81a09629b43.pdf


(Chemist) #83

20171110_Mahanagar-Gas-Limited_44_QuarterUpdate.pdf (471.3 KB)


(samip2u) #84

Hi Sandeep,
i couldnt attend the concallā€¦ howver did the management able to answer the following Qs:
how the volume growth can be looked at for next 12 months ?
any color on Mumbai expansion marketā€¦ including thane region ?

would be thankful if someone happen to shed some light from the callā€¦


(Ajith) #85

(samip2u) #86

The comment sounded more or a generic growth prospect without any clarity on why they expect the growth in the volumesā€¦


#87


#88

Volume growth should pickup and to be in the range of 6 percent approx for H2. Things looking up and expect upsurge in GA3 .
Looking at opening 3-4 stations in Karjat; 1 in uran ; 2 Mumbai- Pune expressway .
Total 9 new stations in Q3 and and approx 6 in Q4 .
Major capex going to be in Navi Mumbai, Thane , Kalyan & Ambernath.
Volume growth in Kalyan and Dombivali is 15-20 % but small if you take overall aggregate .


(vivek423) #89

I think MGL could become a cash generation machine - something like a Seeā€™s candies. By managementā€™s own admission, they are underpricing to acquire customers. They will have significant room to increase prices a few years down the line once they have met their growth targets. The only issue is there isnt a Warren Buffet to force their price increases. And as a GAIL promoted company, government may prevent them from utilizing their pricing power entirely

Disc: Invested


(sko5prasad) #90

Agreed,
It has potential to become true cash generation machine. But 2020 Mumbai license renewal will be key to their future roadmap and also 200 city gas distribution license which is about to be floated will be crucial for sector to prosper.


#91

2020 license renewal shouldnā€™t be problem as per managment and past precedents of renewals being awarded.

Below article predicts that gas distribution companies will report steady earnings


(AKGupta) #92

I have been tracking this company for some time now and think it has real competitive advantages both over other forms of fuels and other companies.
Here is an extract from the Q2FY18 concall about their pricing formula: (if you think about it, they are always at a price advantage, no matter the input cost increase!)

I will be closely tracking their bidding aggressiveness for other cities, Raigad expansion progress. Lots of opportunity in this scrip from the long term. Their moat will not extinguish unless we enter into the age of electric mobility which is at least 10 years away. Also, as noted by the management too, electric vehicles will displace the more polluting fuels first and only then CNG.

Disc: Invested


(Marathondreams) #93

Good results from MNGL. YOY Revenue up 15% , PAT up 25%


(Ajith) #94

As was stated by the management in Q2 concall, the volumes are up by close to 2%.
I hope when we see more growth triggers realized, we will see even better volumes.
The recent surge in oil prices augurs well for the company as they cap their baseline prices as a function of alternative fuels with at least 10 percent margin.

The recent correction offered a good entry.

Disc: Invested