Mahanagar Gas Limited demonstrated strong operational performance in Q3FY26, with volume growth accelerating across key business segments while maintaining healthy profitability metrics. The company's strategic focus on infrastructure expansion and portfolio optimization continues to drive sustainable growth.

Financial Performance Highlights

The company delivered robust financial results for the quarter and nine-month period ended December 31, 2025. Sequential growth momentum remained strong with improved profitability metrics.

The Board approved an interim dividend of 120%, equivalent to INR12 per equity share, reflecting the company's strong cash generation and commitment to shareholder returns.

Volume Growth Across Segments

Mahanagar Gas achieved overall average sales volume of 4.62 MMSCMD in Q3FY26, representing a 0.59% sequential increase and 7.19% year-on-year growth from 4.31 MMSCMD in the corresponding quarter of the previous year.

For the nine months ended December 31, 2025, average gas sales reached 4.556 MMSCMD compared to 4.181 MMSCMD in the corresponding previous period, marking an 8.97% increase.

Infrastructure Expansion Continues

The company maintained its aggressive infrastructure development program during the quarter. Key expansion metrics include:

The company added 32,315 CNG vehicles during the quarter, bringing the total registered CNG vehicles in its geographies to over 1.25 million as of December 31, 2025.

Strategic Gas Sourcing Management

Management highlighted proactive portfolio management in gas sourcing to optimize costs amid volatile market conditions. The company reduced Henry Hub offtake by approximately 4% during the quarter, replacing it with HPHT and spot purchases when economically favorable.

APM and NWG together constituted approximately 45% of the sourcing mix, with APM accounting for 39% and NWG contributing 6%. The company has signed new Brent-linked contracts totaling 12,500 MMBtu starting January 2026, with additional contracts of 10,000 MMBtu planned from April 2026.

UEPL Integration Progress

The Unison Energy Private Limited (UEPL) operations continued showing positive momentum. UEPL achieved average sales volume of 0.283 MMSCMD in Q3FY26 compared to 0.194 MMSCMD in the corresponding quarter of the previous year. The company commissioned its 100th CNG station in UEPL areas at Latur in January 2026, adding 47 stations since acquisition over 23 months.

Outlook and Guidance

Management expects Q4FY26 to show improved performance, potentially achieving double-digit volume growth for the full year. The company maintains its medium-term volume growth guidance of approximately 8-9% annually, with expectations of reaching double-digit growth rates.

For margins, management provided guidance of INR8 to INR9 per SCM for FY27, compared to the current nine-month EBITDA per SCM of INR9.5. The company plans capex of approximately INR1,200 crores for FY27, primarily focused on GA-2, GA-3 expansion and UEPL areas development.

Mahanagar Gas announced its unaudited financial results for the quarter and nine months ended December 31, 2025, demonstrating mixed performance with revenue growth offset by margin pressures. The company's Board of Directors approved the results at their meeting held on February 07, 2026, along with declaring an interim dividend for shareholders. Additionally, the company released a comprehensive investor presentation for the earnings conference call scheduled for February 09, 2026.

Financial Performance Overview

The company reported steady revenue growth during the quarter, with total income reaching ₹2,295.38 crore compared to ₹2,072.73 crore in the corresponding quarter of the previous year. This growth was primarily driven by increased gas sales volumes and improved pricing across segments.

Nine-Month Performance Analysis

For the nine-month period ended December 31, 2025, Mahanagar Gas demonstrated robust top-line growth while facing profitability challenges. Revenue from operations increased significantly to ₹6,801.70 crore from ₹5,825.84 crore in the corresponding period of FY25.

Operational Performance and Volume Growth

The company achieved notable volume growth across its key segments during the nine-month period. Total gas sales volumes increased by 8.97% to 1,252.94 SCM million, with CNG volumes growing 7.24% to 891.18 SCM million and PNG volumes expanding 13.48% to 361.76 SCM million.

Infrastructure and Market Presence

According to the investor presentation, Mahanagar Gas operates across 45,691 sq km area covering Maharashtra and Karnataka regions. The company maintains extensive infrastructure including 491 CNG stations, 8,182 km of pipeline network (717 km steel and 7,465 km PE), serving 12.50 lakh CNG vehicles and 30.70 lakh PNG household connections.

Dividend Declaration and Corporate Actions

The Board of Directors declared an interim dividend of ₹12.00 per equity share, representing 120% on the face value of ₹10 per share for Financial Year 2025-26. The company has fixed Friday, February 13, 2026, as the record date for determining shareholder entitlement to the interim dividend, which will be paid within 30 days from the declaration date.

Key Financial Metrics and Cost Analysis

Despite revenue growth, the company experienced margin compression due to higher input costs and operational expenses. The cost of materials consumed increased to ₹4,150.68 crore for nine months compared to ₹3,398.99 crore in the previous year, reflecting inflationary pressures in the gas supply chain.

Regulatory and Legal Updates

The company continues to navigate several regulatory challenges, including ongoing disputes with GAIL (India) Limited regarding transportation tariff demands of ₹331.80 crore and GST liability issues under Reverse Charge Mechanism amounting to ₹54.33 crore. Management maintains confidence in their legal positions and expects no material outflow of resources based on legal opinions obtained.