Petronet LNG Gets ICICI Securities 'Add' Upgrade On Unchallenging Valuations, Balanced Risk-Reward

Moderate LNG prices, expansion at Dahej by 5mt by H1 FY26 and the completion of the Kochi-Bengaluru pipeline by CY25 should bode well for Petronet LNG, with cash flow hits from the Gopalpur terminal and the petrochemical project to be relatively back ended..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.With the sharply improved LNG pricing environment, 5mt capacity expansion at Dahej by H1 FY26 and the visibility of completion of Kochi–Bengaluru pipeline by CY25, available capacity may improve materially for Petronet LNG Ltd. by FY26E. Our revised estimates, therefore, factor in a reasonable 7% EPS CAGR over FY26–28E. On the other hand, a high run-rate required for the petchem project to achieve reasonable returns does create headwind for Petronet LNG’s return ratios in the near to medium term. On balance, Petronet LNG is looking at EPS growth of ~7% (EPS CAGR FY26–28E), steady cashflow (aggregate operating cash flow of Rs 151.7 billion over FY26–28E) and attractive dividend yield (~5.2% average over FY26–28E). Valuations of 9.1x FY28E EPS and 1.7x price/book value, in our view, are fair – with our revised estimates and target price offering a 11% upside from current market price, particularly in light of the ~13% dip seen in the stock in the last six months. Upgrade to Add (from Sell) .Key risks Upside risks: Stronger utilisation; sharp reduction in LNG prices; and favourable extension of the RasGas contract. Downside risks: Higher disruption in Russian supplies; and slower execution of expansion plans..Click on the attachment to read the full report:.Federal Bank Remains Motilal Oswal's Preferred 'Buy' Among Mid-Size Private Banks - Here's Why.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Petronet LNG Gets ICICI Securities 'Add' Upgrade On Unchallenging Valuations, Balanced Risk-Reward

A high run-rate required for the petchem project to achieve reasonable returns does create headwind for Petronet LNG’s return ratios in the near to medium term.

NDTV Profit

NDTV Profit

Follow Us

DOWNLOAD THE APP