Prabhudas Lilladher's research report on Petronet LNG
FY20 was another strong year operationally for PLNG with EBIDTA growth of 21%, volume growth of 10% and blended gross margin of 13%. PLNG is exploring multiple opportunities to source the cheapest gas to India and Tellurian is one of them. Project IRRs to justify any investment. Lowest tariffs, superb pipeline network and well-entrenched reach in the domestic LNG markets to help PLNG compete with new terminals.
We tweak our estimates for FY21/22E to factor in FY20 actual performance. PLNG is a play on India’s rising LNG imports supported by soft spot LNG prices. We like PLNG’s business model given high earnings visibility. We see limited competition to PLNG’s well-entrenched reach in the LNG business. Reiterate BUY with a revised DCF based PT of Rs384 (Rs378 earlier).
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