Mahanagar Gas Q2 Profit Declines 40% Below Estimates; Signs LNG Partnership with Oil India

Mahanagar Gas Ltd (MGL) announced its financial results for the second quarter on October 29, 2025. The company reported a net profit of ₹191.3 crore, marking a significant 40% decline compared to the previous quarter's ₹318.6 crore. This profit figure fell short of the CNBC-TV18 poll estimate of ₹263 crore.

Revenue for the second quarter stood at ₹2,256.3 crore, showing a modest increase of 1.1% from the prior quarter's ₹2,083 crore. This revenue performance was better than the poll estimate of ₹1,978 crore.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) decreased by 32.5% to ₹338 crore from ₹501 crore in the previous quarter, also missing the CNBC-TV18 poll estimate of ₹379 crore. Consequently, EBITDA margins compressed to 16.5% from 24% in the previous quarter, falling below the estimated 19.2%.

In a separate significant development, Mahanagar Gas Ltd signed a Memorandum of Understanding (MoU) with Oil India Ltd (OIL) on October 6, 2025. This strategic alliance aims to explore collaborative opportunities across the entire liquefied natural gas (LNG) value chain and in emerging clean energy segments, aligning with both companies' goals to expand their presence in the natural gas ecosystem and clean energy initiatives.

Impact: The decline in net profit and EBITDA below market expectations may create short-term investor caution. However, the revenue exceeding estimates and the forward-looking strategic partnership with Oil India Ltd for LNG and clean energy ventures offer a positive outlook for future growth and diversification. The stock's slight movement indicates the market is weighing these mixed results and future potential. Rating: 6/10

Explanation of Terms: Quarter-on-Quarter (QoQ): A comparison of financial performance between two consecutive quarters. Net Profit: The profit a company makes after deducting all expenses, interest, and taxes from its total revenue. Revenue: The total income generated from a company's primary business operations before deducting expenses. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operational profitability. EBITDA Margins: Calculated by dividing EBITDA by revenue, it indicates the percentage of revenue that remains after accounting for operating expenses, excluding financing and accounting decisions. Memorandum of Understanding (MoU): A preliminary, non-binding agreement that signifies a mutual understanding and intent to proceed with a future contract or collaboration. Liquefied Natural Gas (LNG): Natural gas that has been converted into a liquid form by cooling it to approximately -162 degrees Celsius (-260 degrees Fahrenheit) for easier transportation and storage.