The gross margin remained flat QoQ at Rs 17.7/scm (+16% YoY), while opex moderately increased QoQ to Rs 4.9/scm (v/s Rs 4.5 in 3QFY21; flat YoY). CNG volumes stood at 2mmscmd (+2% YoY; +7% QoQ). PNG volumes came in at 0.9mmscmd (+8% YoY; -2% QoQ).
4QFY21 – in line with our estimates: Volumes were in line with our estimate at 2.9mmscmd (up 4% YoY/QoQ). Ebitda/scm stood at Rs 12.1 (v/s Rs 12.4 in 3QFY21; +26% YoY). The gross margin remained flat QoQ at Rs 17.7/scm (+16% YoY), while opex moderately increased QoQ to Rs 4.9/scm (v/s Rs 4.5 in 3QFY21; flat YoY). CNG volumes stood at 2mmscmd (+2% YoY; +7% QoQ). PNG volumes came in at 0.9mmscmd (+8% YoY; -2% QoQ). PNG domestic volumes fell 10% QoQ to 0.46mmscmd – as demand for household cooking declined with the opening up of offices.
Ebitda was in line at Rs 3.2b (+30% YoY). PAT came in at Rs 2.1b (+28% YoY), with the tax rate at 25.8%. FY21 – margins expand; volumes drive impact: Ebitda stood at Rs 9.3b (-11% YoY) despite Ebitda/scm expanding to Rs 11.6 (v/s Rs 9.7 in FY20). Volumes, down 25% YoY to 2.2mmscmd, led the impact. CNG volumes fell 34% YoY to 1.4mmscmd. PNG volumes were flat YoY at 0.8mmscmd (PNG domestic volumes aided 15% growth, while decline was seen in PNG Industry/Commercial). PBT/PAT stood at Rs 8.3b/Rs 6.2b (-15% YoY/-22% YoY). The company announced final dividend of Rs 14/share (in addition to interim dividend of Rs 9/share), totaling Rs 23/share in FY21.
Valuation and view – maintain Buy: The company has been guiding for long-term volume growth of 5–6% per year. Growth would primarily be driven by the development of the Raigad GA, which has total volume potential of ~0.5mmscmd over the next 3–4 years. PNG-commercial penetration in MAHGL’s GAs is just ~20%; as it already has the pipeline infrastructure in place and only last-mile connectivity is required, this presents upside potential in volumes. That said, MAHGL highlighted that the additions of CNG stations in Mumbai (GA1) and Thane Urban (GA2) are proving to be a challenge due to the scarcity of available land.
The stock trades at 14x FY23E EPS of Rs 81, with dividend yield of ~3% for FY22/FY23E. We maintain Buy considering the company’s attractive valuations.