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Buy Petronet LNG: target of Rs 300: Sharekhan

Sharekhan is bullish on Petronet LNG has recommended buy rating on the stock with a target price of Rs 300 in its research report dated December 23, 2020.

December 24, 2020 / 11:18 AM IST
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Sharekhan's research report on Petronet LNG

Sharp recovery in LNG imports (up 12% y-o-y in November and continuous y-o-y growth since July) would help Petronet LNG (PLNG) to sustain high utilisation rate for its Dahej terminal. PLNG to also take 5% re-gas tariff hike for Dahej terminal from January 2021. We do not see any concern on volume outlook from the recent rise in spot LNG price as 98% of volume comes from long-term and tolling contracts. Kochi terminal utilisation to reach breakeven level of 25% by Q4FY2021. PLNG is well positioned to tap India’s rising LNG consumption with 2mmt expansion at Dahej terminal, ramp-up of Kochi terminal utilisation, and focus to enter LNG retailing business. We believe PLNG should command higher valuation multiple given earnings visibility (12% PAT CAGR over FY2021E-FY2023E) in uncertain times, high RoE of 29%, healthy FCF/dividend yield of 8%/6%, and non-regulated business.


Hence, we maintain our Buy on PLNG with an unchanged PT of Rs. 300.

For all recommendations report, click here

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

Broker Research
first published: Dec 24, 2020 11:18 am

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