Sharekhan is bullish on Petronet LNG has recommended buy rating on the stock with a target price of Rs 345 in its research report dated December 18, 2019.
Sharekhan's research report on Petronet LNG
With Kochi-Mangaluru pipeline likely to get commissioned by March 2020, we expect Kochi terminal’s utilisation rate to improve to 25% and 38% in FY2021E and FY2022E. Low spot LNG prices and regulatory push would aid volume growth in the next 2-3 years. Volume growth with annual re-gas tariff hike would drive up EBITDA/PAT at a 12%/8% CAGR over FY2020E-FY2022E. At CMP, stock trades at an attractive valuation of 13x FY2021E EPS and 11.6x FY2022E EPS.
We retain our Buy rating on Petronet LNG with revised PT of Rs. 345 (roll over to FY2022E EPS) given strong earnings visibility and robust RoE of ~29-30%.
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