Debt-free PSU stock in green after LIC increases its stake in the company; Do you hold it? 

Shares of this small-cap PSU stock are trading in the green after the Life Insurance Corporation of India (LIC) increased its stake in the company. Year-to-date, the company’s stock has soared more than 20 percent. 

With a market capitalization of Rs 10,255.11 crores, the stocks of Mahanagar Gas Limited opened their trading hour on Thursday at Rs 1,033.40 and currently trade at Rs 1,038.20. 

The scrip witnessed an intra-day high of Rs 1,045 indicating a gain of around 1.40 percent compared to the previous closing levels of Rs 1,030.90 apiece. The company’s dividend yield is reported at a decent number of 2.50 percent 

In an official filing published by LIC on 13th September 2023, the financial institution informed about an increase of approximately 2 percent stake in Mahanagar Gas Limited during the time horizon from 4th January 2022 to 12th September 2023. 

The holding increased from 7.015 percent to 9.030 percent during the timeframe mentioned above at an average cost of Rs 918.87. As per the latest shareholding data for the June 2023 quarter, LIC held an 8.32 percent stake. Since then, the Institution has increased its stake by 0.71 percent. 

During the recent financial years, the company has outperformed by increasing its operating revenues from Rs 3,560.19 crores during FY21-22 to Rs 6,299.28 crores during FY22-23. Moreover, the after-tax profits of the company went up from Rs 596.95 crores to Rs 790.05 crores during the same time horizon. 

Additionally, the company has improved its profitability metrics such as the return on equity (RoE) as well as return on capital employed (RoCE) with the former going up from 17.48 percent during FY21-22 to 20.44 percent during FY22-23, and, the latter taking a shift from 23.83 percent to 27.55 percent. 

Mahanagar Gas Limited is a company based in India that is engaged in the business of natural gas distribution via its network of pipelines in India. The company distributes compressed natural gas (CNG) for use in vehicles as well as piped natural gas (PNG) for commercial as well as household use. 

Written by Amit Madnani 

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