Buy Petronet LNG; target of Rs 326: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Petronet LNG

We tweak our FY23E estimates by 7%, as we incorporate higher than expected ‘’take or pay’’ charges for underutilization of Dahej terminal. PLNG outperformed our estimates with EBIDTA of Rs16.8bn (+43%Q/Q; PLe Rs10.5bn) and highest ever PAT of Rs11.8bn (+58.6%Q/Q, PLe Rs6.8bn), as the company booked Rs8.5bn towards take or pay charges for underutilization of Dahej terminal. Recent softening of spot LNG prices to USD15-20/mmbtu from Q3 level of over USD30/mmbtu augurs well, as spot volumes for 9MFY23 were muted at 6tbtu vs 15tbtu in 9MFY22. Additionally, the company’s long-term contract is best suited in uncertain global economy. We believe PLNG is a formidable play on India’s rising LNG imports, despite rising domestic gas production backed by 1) high earnings visibility from long term contracts and 2) limited competition to its well-entrenched reach in LNG business.

Outlook

Reiterate ‘BUY’ with a DCF based PT of Rs326 (Rs325).

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Petronet LNG - 21 -01-2023 - prabhu