Buy Petronet LNG; target of Rs 425: Emkay Global Financial

Emkay Global Financial's research report on Petronet LNG

We upgrade PLNG to BUY from Add and raise our TP by 16% to Rs425/sh. We reiterate our positive view on the back of a steady outlook and attractive valuation. While the high Dahej utilization of Q1, driven by the power sector has cooled-off, we believe ~100% utilization is achievable for remainder of the fiscal. The commencement and ramp up of Exxon’s second 1.2mmtpa term contract with higher Kochi tariff in FY26-27, leads to our EPS increasing 7-9% for that period. PLNG’s tariff outlook following QatarGas renewal in CY28 has been a concern with offtakers seeking downward adjustments.

Outlook

However, the management has reiterated any cut won’t be material and minority shareholder interests would be protected. We build in reasonable assumptions, but still see value in the stock. We value PLNG at 15x Sep-26E EPS (vs DCF earlier).

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