Neutral Petronet LNG; target of Rs 385: Motilal Oswal

Motilal Oswal's research report on Petronet LNG

Petronet LNG (PLNG) 2QFY25 EBITDA came in 9% below our estimates at INR12b. Dahej utilization was down 9pp QoQ at 102%, while Kochi utilization stood at 22% (flat QoQ). Reported PAT at INR8.5b was in line with our estimate. In 2Q, the company booked additional provisions worth INR1.1b related 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. Management guided for a minimum throughput of 20mmtpa from Dahej terminal in FY26. However, until now, there has not been any material progress on signing anchor customers for the expanded capacity. In 2HFY25, the management expects capacity utilization at Dahej to remain ~95%-100%. Recently, two tanks were commissioned at Dahej (taking total number of tanks to 8), which will be beneficial for storing and processing more cargo.

Outlook

We value PLNG at 12x Dec’26E EPS to arrive at a TP of INR385. We reiterate our Neutral rating on the stock.