Axis Direct's report on Petronet LNG
PLNG’s EPS will almost double every two years till FY20. Large part of the EPS growth has negligible risk as it is backed by (a) firm volume off-take contracts backed by take-or-pay clause and (b) mandatory 5% hike in re-gas tariffs.
Outlook
PLNG stated that Gorgon LNG volumes of 1.44 mntpa (currently being received at Dahej terminal) is over-and-above the already fully leased-out volume of 15.75 mntpa. This indicates that utilization of Dahej terminal will be 100%+ even on expanded capacity of 15 mntpa. Higher/de-risked volumes and mandatory 5% hike in re-gas tariffs will drive earnings growth. Maintain BUY with TP of Rs 455.
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