HDFC Securities is bullish on Petronet LNG has recommended buy rating on the stock with a target price of Rs 294 in its research report dated November 13, 2020.
HDFC Securities' research report on Petronet LNG
Our BUY recommendation on PLNG with a price target of INR 294 is premised on robust volume offtake in FY21/22E as (1) benign LNG prices will ensure its high imports, in turn allowing full utilisation at Dahej on its expanded capacity, and (2) completion of the Kochi-Mangalore pipeline in 2HFY21 would subsequently raise utilisation at the Kochi terminal. 2Q EBITDA was 43% above our estimates, led by a 19% beat on total volumes and higher-than-anticipated marketing margin. APAT was 69% above our estimates mainly owing to the trickle-down effect of the beat in EBITDA and higher-than-anticipated other income.
Our target price is INR 294, based on Sept-22E cash flows (WACC 11%, terminal growth rate 3%). The stock is trading at 11.8x FY22E EPS.
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