Mahanagar Gas Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Mahanagar Gas Ltd trades at ₹1,100, in a downtrend and 45 weeks into that stage. That is −4.5% against its own 200-day average. It sits at 40% of a 52-week range of ₹940 to ₹1,345. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 1 straight week.

Today the stock is in a downtrend — week 45 of stage 4, confirmed. At ₹1,100 it trades −4.5% versus its 200-day average and sits at 40% of its 52-week range (₹940–₹1,345).

Against the market, two honest reads. Cumulative: over the last 10.0 years the stock moved +111% while the NIFTY 500 moved +231% — behind the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 1 straight week — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

→ The trend is one thing; the bill is another. Are you paying up for it? Next: the P/E sits at the 60th percentile of its own range.

Valuation P/E is the price of ₹1 of annual profit: how many rupees the market pays for each rupee the company earns in a year.

Mahanagar Gas Ltd trades at 12.6× P/E, mid-range by its own standards (60th percentile). Its long-run median P/E is 12.2×, measured across 3.2 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/E of 12.6× is mid-range by its own standards (60th percentile), against a long-run median of 12.2× measured over 3.2 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

Why the multiple sits where it does: over the past year annual EPS moved −19.2% against a −27.2% price move — earnings outran the price, pushing the multiple DOWN its own range.

The price move, decomposed: over 3y, of the +0.6%/yr price move, ~+1.9%/yr came from earnings growth and ~−1.3 pp from the multiple (compressing). The split is the honest approximate (price return minus earnings growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is unremarkable against its own past, so the story rests on the earnings line underneath it, not the multiple.

→ Cheap or dear rides on the earnings. Are they actually growing? Next: the fundamental stage — where the business sits in its arc, and how growth has compounded.

Stage: Deteriorating Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Mahanagar Gas Ltd reads as deteriorating on its fundamental arc. Deteriorating — profit and EPS growth are shrinking (profit growth −19.4% latest against +113.2% at its 12-quarter best), ROCE slipping at 17.2%. The read is built from 12 quarters across 4 curves, on full evidence.

🚨 Why it matters: falling curves mean every cheap-looking ratio below needs a discount for direction.

→ The stage names the trajectory. Next: the revenue line that produces it, quarter by quarter.

4-Factor Sector Score

46.3/100 — rank 4 of 7 in Gas Distribution · 90% evidence confidence

Mahanagar Gas Ltd scores 46.3 out of 100 against the 7 companies it is compared with in Gas Distribution, ranking 4. Cheap but unconfirmed: require improving earnings before treating the valuation as an opportunity.

The four contributions add to the total exactly: 10 + 16.7 + 13 + 6.6 = 46.3. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if profit growth turns negative or margin improvement reverses while sector-relative strength deteriorates.

Revenue Revenue is the top line: everything the company billed its customers in the period.

Mahanagar Gas Ltd reported ₹2,052 Cr of revenue in the Mar 26 quarter, +4.5% year on year. That is the 9th straight quarter of year-on-year growth. Over 3 years it has compounded at 9.4% a year. The last full year, FY26, came in at ₹8,246 Cr. The last four reported quarters add to ₹8,245 Cr.

Mahanagar Gas Ltd reported ₹2,052 Cr of revenue in the Mar 26 quarter, +4.5% year on year. That is the 9th straight quarter of year-on-year growth. Over 3 years it has compounded at 9.4% a year. The last full year, FY26, came in at ₹8,246 Cr. The last four reported quarters add to ₹8,245 Cr.

FY26 revenue came in at ₹8,246 Cr (+13.5% on the year), capping 3 years at 9.4% compound. The latest quarter (Mar 26) printed ₹2,052 Cr, +4.5% year on year — the 9th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +13.9% growth against the decade's 9.4% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +13.5% over the last 4 quarters against +14.5%/yr over the last 8 — stabilising; TTM profit −19.4% vs −19.1%/yr — stabilising.

→ Revenue grew — did margins hold as it scaled? Next: 13.0% this quarter (−7.0 pp YoY).

Operating margin Operating margin is what is left of every ₹100 of sales after running the business, before interest and tax. It is the cleanest read on pricing power and cost control.

Mahanagar Gas Ltd's operating margin is 13.0% in the Mar 26 quarter, −7.0 percentage points against the same quarter a year ago. Across 4 fiscal years the operating margin has ranged 18.0% to 29.0%. The current quarter is running below every full year in that window.

Mahanagar Gas Ltd's operating margin is 13.0% in the Mar 26 quarter, −7.0 percentage points against the same quarter a year ago. Across 4 fiscal years the operating margin has ranged 18.0% to 29.0%. The current quarter is running below every full year in that window.

The latest quarter's operating margin is 13.0%, −7.0 pp against the same quarter a year ago. Across 4 fiscal years the operating margin has ranged 18.0%–29.0%.

🚨 Why the margin moved: operating margin went −7.5 pp year on year while gross margin went −7.0 pp — the loss came mostly from the gross line: input costs and pricing.

→ Margins slipped — did that reach the bottom line? Next: profit −47.4% in the latest quarter.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Mahanagar Gas Ltd earned ₹130 Cr of net profit in the Mar 26 quarter, −47.4% year on year. Full-year FY26 profit was ₹841 Cr. The 3-year compound rate is 2.1%. That is 6.3% of the quarter's revenue. The same quarter a year earlier earned ₹247 Cr.

Mahanagar Gas Ltd earned ₹130 Cr of net profit in the Mar 26 quarter, −47.4% year on year. Full-year FY26 profit was ₹841 Cr. The 3-year compound rate is 2.1%. That is 6.3% of the quarter's revenue. The same quarter a year earlier earned ₹247 Cr.

Mar 26 profit was ₹130 Cr, −47.4% year on year. On the full year, FY26 printed ₹841 Cr (−19.1%), and the 3-year compound rate is 2.1%.

🚨 Why profit moved: revenue contributed +4.5% and the margin −7.0 pp — the quarter was revenue-led despite a thinner margin.

Pace comparison, last four quarters: profit −19.9% vs revenue +13.9%. Profit is growing slower than sales — costs are eating the growth before it reaches the bottom line.

→ Profit rose — but did the cash follow? Next: 131% of the last 3 years' profit arrived as cash.

Cash flow — the router The P&L says what was earned; the cash-flow statement says what actually arrived. Operating cash flow (CFO) against profit is the cleanest lie detector in the accounts.

Over the last 3 fiscal years 131% of Mahanagar Gas Ltd's reported profit arrived as operating cash — the cash follows the profit. In FY26 that was ₹1,162 Cr of operating cash against ₹841 Cr of profit. After ₹1,150 Cr of capital spending, ₹12.0 Cr was left as free cash.

FY26: operating cash of ₹1,162 Cr against reported profit of ₹841 Cr, leaving free cash of ₹12.0 Cr after ₹1,150 Cr of capital spending. Across the last 3 fiscal years the conversion rate is 131% of profit.

Cash-flow readings here are annual — that is the resolution our series carries, so this section moves once a year.

Why conversion sits at 131%: the cash cycle held roughly steady between FY23 and FY26 — so conversion tracks profitability rather than the cycle.

Router verdict: the bigger cash user is investment — capital spending ran 3.8× depreciation over three years, so the next section's job is to check what that build-out is buying.

→ So follow the cash to where it goes. Next: ₹3,966 Cr of building over 3 years.

Where the cash goes Working capital is the cash tied up between paying suppliers and getting paid: debtor days (customers owe), inventory days (stock waits), and the cash conversion cycle (the whole loop, in days of sales).

Mahanagar Gas Ltd's cash conversion cycle runs −7 days in FY26, down from −7 days in FY23. Capital spending ran ₹3,966 Cr over the last 3 years. At FY26 sales of ₹8,246 Cr each day of that cycle holds about ₹22.6 Cr, so roughly ₹−158 Cr sits inside the business at any moment.

FY26: debtors at 20 days, inventory at 4 days — roughly 0.1 months of stock waiting to sell; that is where the cash sits while it waits — for a full cycle of −7 days, tighter than FY23's −7.

The full loop: cash goes out to suppliers and production on day 0; stock waits 4 days to sell; customers pay about 20 days after that; and suppliers themselves are paid at 31 days — netting out to the −7-day cycle.

In money terms: at FY26 sales of ₹8,246 Cr, each day of the cycle holds about ₹22.6 Cr — so the −7-day loop keeps roughly ₹−158 Cr sitting inside the business at any moment.

On the investment side: capital spending of ₹3,966 Cr over the last 3 fiscal years against ₹1,039 Cr of depreciation — the company is building well ahead of wear-and-tear. Capital work-in-progress stands at ₹1,270 Cr (FY26) — capacity paid for but not yet earning.

The synthesis: the cash is going into capacity, not disappearing into the cycle — the question becomes whether the new capacity earns.

→ Does all this activity actually earn its cost of capital? Next: ROCE is 18% and the ROIC − WACC spread is +2.5 pp.

Return on capital Return on capital employed (ROCE) is the profit the whole business earns on all the money in it — equity and debt together. It is the single best test of whether growth creates value or just size.

Mahanagar Gas Ltd earns a ROCE of 18% in FY26. Return on invested capital clears the cost of that capital by +2.5 percentage points, so growth here adds value rather than only size. The wiring behind it is 10.2% net margin on 0.92× asset turns.

FY26 ROCE is 18%.

Why the return is what it is — the wiring (FY26): 10.2% net margin × 0.92× asset turns × 1.40× balance-sheet leverage ≈ 13.1% on equity. Margin does its share; leverage is modest — this is an earned return, not a borrowed one.

The capstone test — ROIC − WACC: 14.5% − 12.0% = a +2.5 pp spread. The 12.0% is a standing assumption for the cost of capital in India, not a per-stock estimate — read the sign and the size of the spread, not the decimals. Positive but thin — value creation with little room for error.

→ Returns like these — is the balance sheet borrowing to make them? Next: debt-to-equity is 0.03.

Debt Debt-to-equity says how much of the business is funded by borrowings. Low is the safe corner; the trend matters as much as the level.

Mahanagar Gas Ltd carries total debt of ₹223 Cr against shareholder equity of ₹6,442 Cr as of Mar 26, a debt-to-equity of 0.03 — effectively unlevered. On the annual view that ratio went from 0.03 in FY22 to 0.03 in FY26. The returns elsewhere on this page are therefore earned rather than borrowed.

Mar 26: total debt of ₹223 Cr against shareholder equity of ₹6,442 Cr — a debt-to-equity of 0.03. On the annual view, debt-to-equity went from 0.03 (FY22) to 0.03 (FY26). The returns on this page are earned, not borrowed.

→ Who owns this, and are they adding or leaving? Next: Foreign institutions cut 8.3 points over 8 quarters.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Foreign institutions cut 8.3 points of Mahanagar Gas Ltd over 8 quarters, the biggest move on the register. That takes foreign institutions to 23.2% of the company. Domestic institutions moved +5.9 points over the same window, to 22.5%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Foreign institutions: −8.3 points over 8 quarters to 23.2%; Domestic institutions: +5.9 points over 8 quarters to 22.5%; Promoters: +0.0 points over 8 quarters to 32.5%.

Why the register moved: rotation — foreign institutions −8.3 points against domestic institutions +5.9 points over 8 quarters, with promoters holding steady — one class of institutions handing the register to the other, not a verdict change by the people closest to the numbers.

→ One last check: does the safety math agree? Next: the balance-sheet safety line.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Mahanagar Gas Ltd: the Z-score reads 5.21. A Z-score above roughly 3 reads as safe and below roughly 1.8 as the distress zone, so this sits well clear of distress. It is a distance-to-distress estimate from the balance sheet, not a forecast of failure.

Why it matters: a Z-score of 5.21 sits well clear of the distress zone — the balance sheet is not the risk here.

The safety line in one sentence: the Z-score reads 5.21.

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