Mahanagar Gas Limited (MGL) reported solid operational results for Q3 and 9MFY26, driven by healthy volume growth across all segments. Total average sales volume increased by 7.19% YoY for the quarter. The company announced an interim dividend of 120% (₹12 per share). Management highlighted continued infrastructure expansion, including 491 CNG stations and growth in customer base, while addressing gas sourcing strategy amid commodity price volatility.
Operational Performance Highlights (Q3 FY26)
MGL achieved an overall average sales volume of 4.62 MMSCMD for the quarter, marking a 0.59% increase sequentially over the previous quarter. Year-on-year, this represents a growth of 7.19% compared to 4.31 MMSCMD in Q3 of the previous year.
- CNG Volume Growth: Increased by 5.92% to 3.281 MMSCMD.
- Domestic PNG Volume Growth: Increased by 9.04% to 0.604 MMSCMD.
- Industrial & Commercial (I&C) Volume Growth: Increased by 11.63% to 0.735 MMSCMD.
For the 9 months ending December 31, 2025, average gas sales grew by 8.97% to 4.556 MMSCMD.
Financial Summary
The operational performance translated into improved profitability:
- Quarterly EBITDA from operations stood at INR352 crores, up from INR338 crores in the previous quarter.
- Net Profit After Tax (PAT) for the quarter was INR202 crores (up from INR193 crores last quarter).
- EBITDA for the 9 months reached INR1,191 crores, with a net PAT of INR715 crores.
The company confirmed that EBITDA per SCM for the 9-month period stood at INR9.5, revised from an earlier figure of INR10.4, while the guidance for the full year is expected to be in the range of INR8 to INR9 going forward.
Infrastructure and Customer Growth
MGL continues to aggressively build out its CGD infrastructure within licensed areas:
- Domestic Households Connected: Connectivity reached nearly 3.07 million households following the addition of 1,24,908 connections during the quarter.
- Pipeline Expansion: 120.3 kilometers of steel and PE pipeline were laid, bringing the total length to over 8,182 kilometers.
- CNG Stations: Added 6 new stations, bringing the total to 491 stations as of December 31, 2025.
- Total CNG Vehicles Registered: Exceeded 1.25 million in MGL’s geographies.
Gas Sourcing and Cost Management
Management discussed managing gas procurement amidst volatility, particularly concerning Henry Hub (HH) prices. The strategy focuses on portfolio management to optimize costs:
The company has been shifting volume away from HH-linked contracts, reducing its offtake by around 4% and swapping it with HPHT and spot purchases when cheaper. A notable measure to offset costs was the INR0.50 per kg price increase for CNG implemented on February 1, 2026.
Regarding Compressed Biogas (CBG) blending, the volume remains small, below 1% of total sales, with 3 stations currently operating on CBG. The primary benefit of the government’s excise duty exemption is expected to accrue more to CBG producers to encourage viability.
Guidance and Future Outlook
Volume growth guidance for the future year is expected to touch double digits, slightly better than the 9% YoY growth seen over the first nine months.
The company announced that the Board approved an interim dividend of 120% (₹12 per equity share) for the current financial year. Capex guidance for FY27 is projected to be in the range of around INR1,200 crores, with a larger allocation towards GA-2 and GA-3 areas.
Regarding the battery cell manufacturing project, the company noted that while land is secured and technology is ready, the project is on a few months hold due to a significant recent drop in battery prices, which necessitates reassessing the final contractual arrangements. The maximum approved investment for the two phases remains at roughly INR380 crores.
Source: BSE
