Mahanagar Gas Limited (MGL), a leading city gas distribution company, reported robust financial results for the first quarter of fiscal year 2026, driven by strong volume growth across segments and improved operational efficiency.

Key Highlights

• Overall average gas sales volume increased by 9.61% year-on-year to 4.23 mmscmd
• EBITDA from operations jumped 28% quarter-on-quarter to ₹485.00 crores
• Net profit after tax rose 29% quarter-on-quarter to ₹324.00 crores
• CNG sales volume grew 7.54% year-on-year to 2.98 mmscmd
• Industrial and commercial sales surged 26.09% year-on-year to 0.68 mmscmd

Financial Performance

MGL's financial performance for Q1 FY26 showcased significant improvement across key metrics:

The company's revenue increased by 5.42% quarter-on-quarter to ₹2,115.20 crores, while EBITDA saw a substantial rise of 28.31% to ₹485.00 crores. Net profit after tax grew by 28.57% to ₹324.00 crores, translating to an earnings per share (EPS) of ₹32.18, up 28.67% from the previous quarter.

Operational Performance

MGL's operational performance was marked by strong volume growth across various segments:

• CNG sales volume increased by 7.54% year-on-year to 2.98 mmscmd
• Domestic PNG sales volume grew by 3.88% year-on-year to 0.57 mmscmd
• Industrial and commercial sales volume surged by 26.09% year-on-year to 0.68 mmscmd

The company added 16,348 domestic household connections during the quarter, bringing the total connectivity to 2.85 million households. MGL also laid 79.08 kilometers of pipeline, expanding its network to over 7,538.63 kilometers.

Infrastructure Expansion

MGL continued to expand its infrastructure and customer base:

• Added 84 industrial and commercial customers, reaching a total of 5,161
• CNG vehicle registrations increased by 20,332, surpassing 1.1 million vehicles
• Maintained a network of 385 CNG stations as of June 30, 2025

Strategic Developments

The National Company Law Tribunal (NCLT) approved the amalgamation scheme of MGL's subsidiary, Unison Enviro Private Limited (UEPL), with the parent company. The merger is expected to be effective by August 15, 2025, which should lead to operational synergies and improved efficiency.

Future Outlook

Looking ahead, MGL has outlined its growth strategy:

• Planned CAPEX of ₹1,100-1,300 crores for the next two years
• Targeting the addition of 80 new CNG stations in the current fiscal year
• Focusing on expanding its presence in GA-2 and GA-3 areas

Management Commentary

Ashu Shinghal, Managing Director of MGL, commented on the results, "We are pleased with our strong performance in Q1 FY26, which reflects the growing demand for natural gas across all our segments. Our strategic investments in infrastructure and customer base expansion are yielding positive results. The upcoming merger with UEPL will further strengthen our market position and operational capabilities."

MGL's robust Q1 FY26 results demonstrate the company's resilience and growth potential in the city gas distribution sector. With its ongoing expansion plans and strategic initiatives, MGL is well-positioned to capitalize on the increasing adoption of natural gas as a cleaner fuel alternative.

Mahanagar Gas Limited (MGL), one of India's leading city gas distribution companies, is poised for potentially stronger financial performance in the coming quarter. The company has expressed optimism about improved profit margins, citing a combination of lower gas prices and the possibility of higher Brent crude prices compared to the previous quarter.

Improved EBITDA Margins

During a recent earnings call, MGL reported a notable improvement in its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margins. This positive trend suggests enhanced operational efficiency and cost management by the company.

Financial Performance Highlights

MGL's financial results for the most recent quarter demonstrate solid growth:

The company has shown impressive year-over-year growth across key financial metrics, with revenues increasing by 24.30% and PAT (Profit After Tax) rising by 13.98%.

Operational Metrics

MGL's operational performance also shows positive trends:

• Total gas sales volume increased to 4.23 million standard cubic meters (SCM) in Q1 FY26, up from 3.86 million SCM in Q1 FY25.
• CNG sales volume grew to 2.98 million SCM in Q1 FY26 from 2.77 million SCM in Q1 FY25.
• Domestic PNG connections reached 2.85 million households.

Market Position and Infrastructure

Mahanagar Gas continues to strengthen its market position with robust infrastructure:

• Over 7,539 km of pipeline network
• 385 CNG filling stations
• Serving more than 1.13 million CNG vehicles and 2.85 million PNG households

Future Outlook

The company's anticipation of better profit margins is based on the following factors:

1. Lower gas prices: Expected to reduce input costs and improve profitability.
2. Potential higher Brent prices: May lead to increased competitiveness of natural gas compared to alternative fuels.

These factors, combined with MGL's strong market presence and expanding infrastructure, position the company favorably for continued growth and improved financial performance in the coming quarters.

As Mahanagar Gas navigates the dynamic energy market, investors and industry observers will be keenly watching how these anticipated margin improvements materialize and impact the company's overall financial health.