Motilal Oswal is bullish on Petronet LNG recommended buy rating on the stock with a target price of Rs 336 in its research report dated July 18, 2020.
Motilal Oswal 's research report on Petronet LNG
We hosted a two-day roadshow with Petronet LNG (PLNG) to understand the company’s future plans. The lucidity of the Tellurian deal (expression of unattractive investment) and long-term growth concerns (addressed by the Gopalpur and Sri Lanka terminals, and ssLNG) underpin our conviction in the company; we reiterate it as our top pick in the midcap space, with TP of INR336. Here are some key insights:
With the concerns related to Tellurian resolved and answers provided on long-term growth, the stock trades at a very appealing valuation of 12.4x FY22E EPS of INR21.3 and 7.1x FY22E EV/EBITDA, with an EBITDA CAGR of ~15% expected over FY20-22E. We value PLNG on DCF to arrive at a fair value of INR336. Reiterate Buy.
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