Moneycontrol
Feb 16, 2017 01:16 PM IST | Source: Moneycontrol.com

Hold Petronet LNG; target of Rs 407: Edelweiss

Edelweiss recommended hold rating on Petronet LNG with a target price of Rs 407 in its research report dated February 13, 2017.

Hold Petronet LNG; target of Rs 407: Edelweiss


Edelweiss' research report on Petronet LNG


Petronet LNG (PLNG) reported robust operational performance for Q3FY17 with volumes (up 1% QoQ, 34% YoY) 5% ahead of estimates. Trading margin, however, missed with sharp trading loss (versus gains estimated), resulting in earnings miss (EBITDA 12% below estimates). Higher‐than‐expected utilisation at Dahej implies successful stabilisation of the recent 5MMT expansion.


Outlook


We expect strong growth in near‐term volumes on expanded Dahej capacity, which are largely secured through use‐or‐pay contracts. We forecast robust 20% EPS CAGR over FY16‐21 (volume CAGR: 13%). However, the stock is expensive at 2.8x FY19E P/BV with RoE of 19%, largely pricing in the upside. We maintain ‘HOLD/SP’.

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