MGL margin falls 2.44 percentage points as costs outpace revenue
Consolidated net profit fell 29.71% QoQ, with higher interest, depreciation and tax adding to the pressure.
Filed 03 Nov 2026, 14:36 IST · Mahanagar Gas Ltd (MGL)
Key takeaways
- Revenue grew 6.98% QoQ, but expenses grew 10.03%, cutting operating margin by 2.44 percentage points.
- Consolidated net profit fell 29.71% QoQ as interest rose 32.04% and the tax rate increased 1.63 percentage points.
- MGL's 12.01% operating margin was 3.19 percentage points below the 15.2% median for 20 reported Energy peers.
Price around the results
Revenue growth did not cover cost growth
Consolidated revenue rose 6.98% QoQ, but expenses increased 10.03%, causing operating profit to decline 11.07%. Operating margin fell from 14.45% in Q1FY27 to 12.01% in Q2FY27, a 2.44 percentage-point contraction. This marks a second consecutive quarter in the available trend with a lower operating margin.
Higher financing and tax costs deepened the profit decline
Profit before tax fell 28.14% QoQ, a sharper decline than operating profit, as interest costs rose 32.04% and depreciation increased 7.06%. Other income fell 83.27% and accounted for only 2.72% of pre-tax profit, so it provided limited support to reported earnings. The tax rate rose from 25.34% to 26.97%, adding to the 29.71% decline in net profit.
MGL's margin trails the reported Energy peer median
Among 20 Energy companies that have reported, MGL's 12.01% operating margin was 3.19 percentage points below the 15.2% sector median. Its margin ranked eighth from the bottom in this comparison.
Initial market response was positive
The stock rose 1.26% at the recorded reaction point after the results, following a 1.58% opening gap. Trading volume was 5.55 times the reference level.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹2,538 cr | ₹2,373 cr | +6.98% |
| Other income | ₹5 cr | ₹30 cr | -83.27% |
| Expenses | ₹2,234 cr | ₹2,030 cr | +10.03% |
| Operating profit | ₹305 cr | ₹343 cr | -11.07% |
| Operating margin (%) | 12.01% | 14.45% | — |
| Interest | ₹8 cr | ₹6 cr | +32.04% |
| Depreciation | ₹117 cr | ₹109 cr | +7.06% |
| Profit before tax | ₹185 cr | ₹258 cr | -28.14% |
| Tax | ₹50 cr | ₹65 cr | -23.51% |
| Net profit | ₹135 cr | ₹193 cr | -29.71% |
| EPS (₹) | ₹13.73 | ₹19.54 | -29.73% |
Operating margin of 12.01% compares with a Energy sector median of 15.20% across 20 peers that have reported Q2FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.26% | -0.32% |
Volume on the results session was 5.55× its 20-day average.
What to watch
- Whether operating margin improves from 12.01% after the 2.44 percentage-point QoQ decline.
- Whether expenses grow slower than the 10.03% QoQ pace.
- Whether the tax rate moves back from 26.97%.