Neutral Petronet LNG; target of Rs 380: Motilal Oswal

Motilal Oswal's research report on Petronet LNG

Petronet LNG (PLNG) recorded lower-than-estimated EBITDA of INR13.7b in 1QFY25. Dahej utilization was up 13% QoQ at 112%, while Kochi utilization stood at 22% (+1.6pp YoY). Reported PAT at INR11.4b was above our estimate. In 1Q, the company booked additional provisions worth INR1.3b with respect to use-or-pay (UoP) charges. The Dahej terminal expansion from 17.5mmt to 22.5mmt is expected to be completed by Mar’25, after which it will be available for use . However, till now, there has not been any material progress on signing anchor customers for the expanded capacity. The management highlighted that the 250km stretch of the Kochi-Bangalore pipeline will be completed by Mar’25, after which Kochi terminal utilization should improve. In 2Q, utilization trends for Dahej/Kochi are expected to remain robust, though likely down QoQ.

Outlook

We value PLNG at 12x FY26E EPS to arrive at a TP of INR380. We reiterate our Neutral rating on the stock.