Mahanagar Gas Q1 FY27 Results (NSE: MGL)
Signal: Margin pressure
The read
Q1FY27 headline PAT of ₹194 Cr missed the year-ago ₹320 Cr by 39% due to severe gross margin compression from surging natural gas purchase costs (raw material cost spiked from 57.5% to 73.1% of net revenue). Volumes grew 7% YoY and revenue +14%, but cost inflation overwhelmed. Sequentially, EBITDA margin recovered from Q4's 12.7% to 14.5% on seasonal volume uptick and partial cost pass-through, but remains far below the 24.1% of Q1FY26. The company's ability to restore margins hinges on regulatory tariff revisions and moderation in gas prices — both external factors.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹2,371.71 Cr | +13.95% | +15.62% |
| EBIT | ₹259.07 Cr | -40.07% | |
| Net profit | ₹193.7 Cr | -39.39% | |
| EPS | ₹19.61 | -39.39% | |
| EBIT margin | 14.46% |
P&L walk
Consolidated revenue inline with standalone at ₹2,599 Cr gross; PAT ₹193 Cr vs ₹319 Cr YoY — the standalone dominates, with associates contributing negligible losses.
Segments
Single segment — natural gas distribution. No segment table disclosed; consolidated results fully driven by parent MGL.
Key positives
- Total volumes grew 7% YoY to 433.7 SCM Mn, with CNG up 9.7% — indicating robust end-user demand despite higher retail prices.
- PNG net sales revenue surged 34% YoY to ₹739 Cr on price pass-through to industrial/commercial customers.
- Sequential recovery: EBITDA margin improved 177bps QoQ from 12.7% to 14.5% as volumes rose and operating leverage partially kicked in.
Key concerns
- Gross margin collapsed ~1560bps YoY as raw material (natural gas purchase) cost rose to 73.1% of net revenue vs 57.5% a year ago — the single biggest earnings drag.
- EBITDA margin at 14.5% is less than half of Q1FY26's 24.1% and well below the 3-year average, signaling that pricing power is insufficient to pass through cost inflation instantly.
- PAT of ₹194 Cr is at the lowest for a June quarter in the last 3 years, excluding a one-off revenue reversal benefit in Q1FY26.
Research and educational content only. Not investment advice.