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Last Updated : May 17, 2019 12:58 PM IST | Source: Moneycontrol.com

Buy Petronet LNG; target of Rs 300: Motilal Oswal

Motilal Oswal is bullish on Petronet LNG has recommended buy rating on the stock with a target price of Rs 300 in its research report dated May 16, 2019.

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Motilal Oswal's research report on Petronet LNG


4QFY19 PAT missed est. by 21% at INR4.4b (-16% YoY, -22% QoQ), while EBIDTA too missed est. by ~27% at INR6.3b (-24% YoY, -26% QoQ), led by inventory markdown of INR1,190m. Spot LNG price for PLNG declined to USD4.3/mmbtu from USD8.3/mmbtu leading to inventory loss. 4QFY19 volumes were ~2% lower than est. at 205.1tbtu (-4% YoY, +1% QoQ), while FY19 volumes were at ~844tbtu (v/s 847tbtu in FY18). Volume loss was a seasonal effect due to shutdown of (a) refineries at Panipat and Koyali, (b) fertilizer plants. For the quarter, utilization at Dahej stood at 104% (108% in FY19; flat YoY in FY18); while utilization at Kochi increased to 11% (10% in FY19; 12% in FY18).


Outlook


The stock trades at 12.1x FY20E EPS of INR18.5. Modeling in capex guidance of INR6b for FY20 in line with the company's guidance, we value PLNG on DCF (WACC: 12.0%, TGR: 3%) to arrive at fair value of INR300 (from INR315). Reiterate Buy, with an implied upside of ~34% to the current market price.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

First Published on May 17, 2019 12:58 pm
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