Buy Petronet LNG; target of Rs 315: Motilal Oswal

Motilal Oswal's research report on Petronet LNG

Dahej is expanding from 15mmtpa to 17.5mmtpa capacity in few weeks. On the expanded capacity, utilization contracts are only for 15.75mmtpa. Spot LNG prices have declined to ~7% of Brent for future deliveries. Favorable low prices should enable PLNG to garner handsome marketing margins. Competition too remains weak. Reiterate Buy with target price of INR315.

Outlook

We value the stock using DCF (WACC: 12%, terminal growth: 3%). With a target price of INR315, we reiterate Buy on PLNG.