Buy Petronet LNG; target of Rs 265: Sharekhan

Sharekhan is bullish on Petronet LNG has recommended buy rating on the stock with a target price of Rs 265 in its research report dated May 04, 2023.

Broker Research

May 07, 2023 / 11:22 IST

Buy

26 Aug, 2025 12:21

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Sharekhan's research report on Petronet LNG

For Q4FY2022, PLNG’s adjusted operating profit of Rs. 998 crore, up 21% q-o-q, was below our estimate due to higher opex and lower inventory gain of Rs. 22 crore. Total re-gas volume of 184 tbtu (up 10% q-o-q) was 4% above our estimate of 177 tbtu. Dahej terminal utilisation improved to 77% (versus 69% in Q3FY2023) with re-gas volume up 11% q-o-q to 171 tbtu. Kochi volume was flat q-o-q at 13 tbtu (utilisation of 20%). The recent sharp fall in spot LNG price has improved the re-gas volume outlook, which is reflected in the sharp improvement in Dahej utilisation to 97% in April 2023. Management also expects Kochi utilisation to improve to 35-50% post the completion of Kochi-Mangalore pipeline by November 2023 and ramp-up of Gorgon volume.

Outlook

We maintain our Buy rating on PLNG with a revised PT of Rs. 265. The valuation of 9.5x/8.1x its FY2024E/FY2025E EPS is attractive and stock offers healthy dividend yield of 4-5%.

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