Buy Petronet LNG; target of Rs 390: Emkay Global Financial

Emkay Global Financial's research report on Petronet LNG

PLNG posted Q3FY25 adj SA EBITDA of Rs12.8bn and APAT of Rs8.9bn, which were in-line. Provision on Use or Pay (UoP) was Rs1.5bn, while UoP income booked for CY24 was Rs1.17bn. Dahej utilization in Q3 was 95% (in-line) with long-term volume flat QoQ and tolling volume down 7% QoQ. Spot fell to 3tbtu vs 6tbtu QoQ. Kochi utilization was 23% (also in-line). Implied marketing margin was higher on trading-inventory gains while forex losses led to a jump in Other Expenses. The management expects Dahej expansion to aid volume growth, with discussions on for tie ups. PLNG has also informed all defaulting offtakers on invoking BG for CY21 UoP,

Outlook

With the deadline being 31-Mar-25. We raise FY25E EPS 9% based on 9M runrate, and retain FY26-27 estimates. We cut TP by ~8% to Rs390, building in conservative LT assumptions; retain BUY.