Petronet LNG Shares Gain As Analysts Stay Optimistic After Q1
Analysts stayed optimistic about Petronet LNG Ltd. as the company tempered down its aggressive capex plan, and on hopes of a recovery in volumes.
Profit rose 5% sequentially to Rs 670.06 crore, according to an exchange filing, surpassing the Bloomberg consensus estimate of Rs 639 crore.
Petronet LNG’s Q1 FY22 Highlights (QoQ, Consolidated)
Revenue rose 13.5% to Rs 8,597.90 crore, against a forecast of Rs 8,398 crore.
Ebitda dipped 3.6% to Rs 1,051.53 crore compared with Rs 1,091.09 crore.
Margin was at 12.23% against 14.40%.
Shares of Petronet LNG Ltd. gained as much as 4.96% to Rs 225.20 apiece around 12:30 p.m. on Tuesday. Of the 38 analysts tracking the company, 27 maintained ‘buy’ and 11 recommended a ‘hold’, according to Bloomberg data. The 12-month consensus price target implies an upside of 22.2%.
Here's what brokerages have made of Petronet LNG’s Q1 results.
Maintains ‘buy’ with target price raised to Rs 330, an implied upside of 53.81%.
Dahej utilisation fell to 86% due to second wave, but still outperformed estimate.
Kochi volumes rose 7% due to pipeline connectivity, but low utilisation remains a concern.
Firm volume commitment at Dahej resulting in utilisation level ahead of industry.
Company addressed a key area of concern by toning down its aggressive capex guidance.
Meaningful correction in spot LNG prices could aid volumes, leading to earnings upgrades.
Upgrades to ‘outperform’ from ‘neutral’ with target price at Rs 252, an implied upside of 12.93%.
Expects volume to recover from Q2 onwards.
Fertiliser and city gas distribution are major demand booster, while demand from power and refineries are stable.
Lower capex and revival in volume should likely lead to a boost in valuation.
Significant increase in crude oil/spot LNG price may lead to lower demand for LNG.
Sharp decline in Kochi traffic may impact company’s profitability negatively.
Maintains ‘neutral’ with target price reduced to Rs 235, still an implied upside of 9.53%.
Kochi terminal ramp-up has been slower, while Dahej utilisation declined to 87%.
India’s LNG imports outlooks remains weak with rising new domestic gas production and elevated LNG prices.
Continues to believe that Dahej terminal is vulnerable.
Aggressive capex plans seem aspirational at the moment and are likely to be taken negatively by investors.
Upgrades to ‘hold’ from ‘reduce’, with target price at Rs 213, a potential downside of 4.33%.
Dahej utilisation was at four-quarter low of 89% as Covid and spot LNG surge hit demand.
Company’s confidence on Dahej volume recovery in FY22-FY23E remains a positive.
Company has taken board approval for putting up 20-24 LNG stations and placed order for five stations.
Maintains ‘buy’ with target price at Rs 351, a potential upside of 63.60%.
Management tempered down its earlier aggressive capex plans to set up LNG stations and CBG plants, a major positive.
Company’s long-term contract demand remained robust, while spot LNG accounted for 4% of volumes.
Company is play on India’s rising LNG imports and the business model has high earnings visibility.