Motilal Oswal has given Buy recommendation for Petronet LNG recommended buy rating on the stock with a target price of Rs 300 in its research rep with a target price of Rs. 300 in its research report issued on Nov 10, 2021
Motilal Oswal’s research report on Petronet LNG
Petronet LNG (PLNG) reported a beat on our estimates, led by higher-than-estimated throughput (Dahej back at >100% at 102%, after being subdued for the last three quarters, with Kochi utilization robust at ~24%). The company expects spot LNG prices to cool off post the winter season. Currently, huge demand is seen from China and Japan, with supply constraints resulting in a spike in spot LNG prices. Despite the immediate challenges, the management remains confident about achieving >900tbtu in volumes for FY22 (~96% utilization, i.e., flat YoY – supported by tied up contracts). Our numbers are in line with the aforementioned guidance, with the full-year volume assumption at 910tbtu. Company is also looking at extending its long term contract with RasGas beyond 2028.
The stock trades at 10.7x FY23E EPS and 6.1x FY23E EV/EBITDA. We value PLNG on a DCF basis to arrive at a fair value of INR300. Maintain Buy.