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Mahanagar Gas Ltd

| Quarterly Financial Results Q3 FY 2025-26

NEUTRAL SENTIMENT

Report Source

⬤7th Feb 26

Summary : Mahanagar Gas reports mixed Q3 results with volume growth, dividend declaration, and ongoing legal challenges.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Nine months ended Dec 31, 2025 (Standalone): Cost of Material Consumed Rs. 4,150.68 Cr, Employee Benefits Expense Rs. 133.38 Cr, Depreciation and Amortisation Expenses Rs. 303.10 Cr, Total Expenses Rs. 5,929.87 Cr.
  2. Quarter ended Dec 31, 2025 (Standalone): Cost of Material Consumed Rs. 1,415.73 Cr, Employee Benefits Expense Rs. 47.47 Cr, Depreciation and Amortisation Expenses Rs. 103.37 Cr, Total Expenses Rs. 2,023.57 Cr.
  3. Nine months ended Dec 31, 2025 (Standalone): Revenue from Operations Rs. 6,801.70 Cr, Total Income Rs. 6,891.91 Cr, Total Net Revenue from Operations Rs. 6,188.99 Cr.
  4. Quarter ended Dec 31, 2025 (Standalone): Revenue from Operations Rs. 2,265.97 Cr, Total Income Rs. 2,295.38 Cr, Total Net Revenue from Operations Rs. 2,058.28 Cr.
  5. Nine months ended Dec 31, 2025 (Standalone): CNG Net Sales Rs. 4,448.85 Cr, PNG Net Sales Rs. 1,704.25 Cr, LNG Net Sales Rs. 4.41 Cr, Traded Items Net Sales Rs. 8.51 Cr.
  6. Quarter ended Dec 31, 2025 (Standalone): CNG Net Sales Rs. 1,474.43 Cr, PNG Net Sales Rs. 573.33 Cr, LNG Net Sales Rs. 0.72 Cr, Traded Items Net Sales Rs. 3.16 Cr.
  7. Disputed GAIL transportation tariff demand of Rs. 331.80 Crore.
  8. Disputed GST liability of Rs. 54.33 Crore plus penalty and interest.
  9. Company believes it has a strong case and expects no outflow of resources for these disputes.
  10. GAIL (India) Limited for transportation tariff dispute.
  11. Both standalone and consolidated financial results are presented.
  12. Consolidated results include Mahanagar LNG Private Limited (subsidiary) and associates International Battery Company India Private Limited and 3EV Industries Private Limited.
  13. Unison Enviro Private Limited (UEPL) amalgamated with the company effective February 01, 2024.

Corporate Overview

  1. Ongoing legal disputes regarding GAIL transportation tariff and GST liability.
  2. Increased gratuity liability due to new Labour Codes.
  3. Selling and distribution of natural gas.
  4. Formal and factual, reporting on board decisions and financial results.
  5. PNG-Domestic
  6. PNG-Industry/Commercial
  7. Traded Items

Risk Factors

  1. Significant GAIL transportation tariff dispute.
  2. Pending GST liability on road reinstatement.
  3. Increased gratuity liability from new Labour Codes.
  4. Declining LNG sales volume is a concern.

Key Drivers

  1. Interim dividend of Rs. 12 declared.
  2. Strong sales volume growth across segments.
  3. Subsidiary amalgamation enhances business scope.
  4. Strategic investments in associate companies.

Auditor’s Report

  1. Unmodified review conclusion, stating no material misstatement found.
  2. No audit opinion expressed as it is a review report.
  3. Reliance on other auditors for interim financial information of one subsidiary.
  4. Reliance on management for interim financial information of two associates.

Board Commentary

  1. Interim dividend of Rs. 12/- per equity share declared for FY 2025-26.
  2. Record date fixed as February 13, 2026, for dividend entitlement.
  3. Disputed GAIL transportation tariff demand of Rs. 331.80 Crore.
  4. Disputed GST liability of Rs. 54.33 Crore plus penalty and interest.
  5. Increased gratuity liability of Rs. 9.94 Crore due to new Labour Codes.
  6. Ongoing dispute with GAIL regarding transportation tariff (Rs. 331.80 Cr).
  7. Dispute with CGST and Central Excise regarding GST liability (Rs. 54.33 Cr).
  8. Impact of new Labour Codes leading to increased gratuity liability (Rs. 9.94 Cr).
  9. Amalgamation of Unison Enviro Private Limited (UEPL) effective February 01, 2024.
  10. Increased stake in 3EV Industries Private Limited to 24.54% (later 23.51%).
  11. Acquired 44% stake in International Battery Company India Private Limited.

Corporate Governance

  1. Audit Committee reviewed and recommended financial results to the Board.

Management Discussion & Analysis

Operational Focus Areas

  1. Monitoring developments related to new Labour Codes and evaluating additional impact.
  2. Contesting legal demands for transportation tariff and GST liability.

Performance Drivers

  1. Increased sales volumes across CNG, PNG-Domestic, and PNG-Industry/Commercial segments.
  2. Growth in total net revenue from operations.

Risk Control Measures

  1. Company believes it has a strong case in legal disputes based on legal opinions, expecting no outflow of resources.
  2. Continuously monitoring and evaluating impact of new Labour Codes.

Critical Risks

  1. Disputed GAIL transportation tariff demand of Rs. 331.80 Crore.
  2. Disputed GST liability of Rs. 54.33 Crore plus penalty and interest.
  3. Increased gratuity liability of Rs. 9.94 Crore due to new Labour Codes.