Hold Petronet LNG; target of Rs 235: ICICI Securities

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26 Aug, 2025 12:21

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ICICI Securities research report on Petronet LNG

Petronet LNG (PLNG) has reported a steady 11% YoY improvement in EBITDA to INR 11.8bn and a 13% YoY rise in PAT to INR 7.9bn, up 25/29% QoQ, in line with I-Sec estimates. Dahej (in Gujarat) volumes of 217tbtu improved materially, rising 11/26% YoY/QoQ, respectively, while Kochi (in Kerala) volumes of 13tbtu rose 8% YoY, flat QoQ. Expansion plans for Dahej to enhance capacity to 22.5mtpa by FY26E remain on track and the company is progressing on its INR 140bn petrochemical plant as well. Muted valuations, sharp moderation in spot LNG prices and our sense that global LNG supplies can steadily improve over the next 2-3 years, lead us to believe operational prospects can be brighter over FY24E-FY25E. However, concerns on capital allocation remain unresolved and we continue to be sceptical of the company’s plan to invest INR140bn150bn in an unrelated business line (petchem). Reiterate HOLD.

Outlook

We value PLNG as per the DCF methodology, using a WACC of 12%, DER of 15%, long-term Dahej utilisation assumption of 100% and terminal growth rate of 4.0%. This leads to our target price of INR235/sh, ~1% upside from CMP.

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Petronet LNG - 01 -08 - 2023 - isc