Are Mahanagar Gas latest results good or bad?

Mahanagar Gas's latest financial results for the quarter ended September 2025 indicate a complex operational landscape. The company reported net sales of ₹2,050.40 crores, reflecting a year-on-year growth of 14.79% compared to ₹1,786.25 crores in the same quarter last year. This topline growth, however, contrasts sharply with the bottom-line performance, as net profit fell to ₹191.37 crores, marking a significant decline of 33.27% year-on-year.
The operating profit, which excludes other income, also faced challenges, decreasing to ₹337.86 crores from ₹413.42 crores in the previous year, representing an 18.28% contraction. This decline in operating profit has led to a reduction in the operating profit margin, which fell to 16.48%, down from 23.14% a year ago. This margin compression highlights the pressures faced by the company in its core gas distribution business, likely due to rising input costs and increased competition.

Additionally, Mahanagar Gas's return on equity remains strong at 17.70%, though it indicates a moderation from historical performance levels. The company continues to maintain a debt-free balance sheet, which provides a degree of financial stability amidst these operational challenges.

The quarter's results reveal a stark divergence between revenue growth and profitability, suggesting that while Mahanagar Gas is successfully increasing sales, it is struggling to convert this growth into profits effectively. Overall, the company saw an adjustment in its evaluation, reflecting these mixed operational trends and financial pressures.