Buy Petronet LNG: Ventura

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26 Aug, 2025 12:21

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Ventura is bullish on Petronet LNG and has recommended buy rating on the stock in its January 17, 2013 research report.
 
“Petronet LNG, On the account of its aggressive capex plans to increase capacity from 10.0mn tonne to 17.5mn tonne over the next 3-4 years, we believe PLL is well-poised to benefit from the gas demand-supply mismatch in the country. However, PLL’s earnings growth over the period FY14-15 is sensitive to timely completion of pipeline projects of GAIL, and preparedness of end-users to switch over to gas. Nevertheless we believe backed by the long-term capacity contracts (such as the one with Gujarat State Petroleum Corpn) and news flow on pipeline completion are key triggers to the stock. We maintain a BUY on Petronet LNG (PLL) with a target price of Rs.182 (11.2x FY14 valuations).”
 
“Strong operation of the Dahej terminal at 110% utilisation and higher spot margin aided Petronet LNG to post a net profit growth of 1.2% qoq to Rs.318.5 crore. The revenue for the quarter stood at Rs.8375 crore, up 11.9% qoq. The volumes for the quarter stood at 140.6 tbtus, higher by 4.2% qoq on the back of higher demand from some fertilizers units for this quarter. While the marketing margins on the spot and short term cargo had increased on the yoy basis they have has declined on a qoq basis. We expect the margins to normalize, however we have not factored the same in our model. During the quarter, the company regassified 141.5 TBTU of LNG, down 2.4% Y-o-Y, however, it grew 4.8% sequentially; ahead of our estimated volumes of 138.4 TBTU. In the quarter, PLNG capacity utilization rose to ~110% up from ~105% in Q2FY13 and ~113% in Q3FY12. The share of long-term cargos increased 200bps QoQ to 69% whereas that of third-party volumes declined 300bps QoQ and 500bps YoY to 10%.”
 
“Petronet’s Kochi Terminal is likely to be commissioned in Q1FY14 as against our earlier expectation of Q1CY13. Kochi volumes are likely to be slower than expected on account of the delays in the GAIL's Kochi- Koottanad- Bangalore-Mangalore Pipeline. PLNG management stated that Kochi refinery and FACT are likely to consume around 0.6 mmscmd (~0.17 mmt) and 1.2 mmscmd (~0.34 mmt) respectively at the current capacity levels. The second jetty at Dahej in on schedule. The capex requirement of the second jetty at Dahej is ~Rs. 10 bn. PLNG has already spent ~Rs. 0.3 bn. PLNG regassification capacity is likely to go up to 12-12.5 mmt when the second jetty becomes operational. PLNG is targeting to commission the second jetty by Q1 CY2014. The expansion of the Dahej capacity by 5 mmtpa (by 2015) is in process. The company has already shortlisted EPC bidders and environmental clearance process is on track. On Gangavaram, the company is looking at the possibility of bringing a Floating storage and re-gasification unit (FSRU) of about 2-3 mmt capacity by the end of 2014 while the land based terminal is likely to be commission by the end of 2016,” says Ventura research report.

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