The price target assigned by Morgan Stanley suggests a potential upside of more than 30% from Monday’s closing price.
The foreign brokerage firm said in a note that Mumbai is an ever-expanding city with growing demand for travel and energy.
Natural gas is considered the fuel of the future for Mumbai and MGL is accelerating its adoption while aggressively gaining market share to serve a 125 billion mile market.
Morgan Stanley described this as a “Tesla-like moment” for MGL and Mumbai’s gas deployment.
The brokerage predicts that the global gas market will be in balance by 2025 and oversupplied by 2027.
About one-fifth of MGL’s gas procurement is related to LNG. While this may reduce margins (returns close to 15% ROCE for regulated utilities), it added that structural volume growth would be the key driver for the rerating. Ta.
MK Global also upgraded MGL stock from “add” to “buy” and set a price target of 1.70 rupees.
The brokerage said it expects a weak third quarter for MGL, but could see improvement in the fourth quarter of FY25 with a partial reinstatement of APM allocation cuts and potential price increases. Ta. Supported by favorable LNG procurement, CGD companies may return to standard profit levels in FY2026.
Of the 33 analysts covering Mahanagar Gas, 15 have recommended the stock as a ‘buy’ while the remaining six have rated it a ‘hold’. The remaining 12 items have a counter rating of “Sell.”
MGL stock settled 4.37% lower at ₹1,229.90 on Monday. The stock price has corrected 38% from its recent high of ₹1,988.
