Synopsis:
Investec sees Petronet LNG Limited as a fast-growing energy company with strong long-term growth potential, supported by cost efficiency, large-scale operations, and expanded capacity.
The shares of one of the leading companies in Indian energy are on the radar after the brokerage has given a ‘Buy’ rating with upside potential of 41 percent, indicating long-term growth potential.
With a market capitalization of Rs.42,630 crores, the shares of Petronet LNG Limited were at Rs.284.20, up by 0.35 percent from its previous day closing price of Rs.283.85.
Target & Rationale
Investec has given a ‘Buy’ rating to Petronet LNG Limited, with a target price of Rs. 400, an upside potential of 40.9 percent from its last traded price of Rs. 283.85. The broker expects the company to achieve strong long-term growth, backed by cost efficiencies, large-scale operations, and expanded capacity at its Dahej and Kochi terminals.
A potential global LNG surplus may reduce prices, boosting demand for its services. Investec views Petronet LNG as a valuable, resilient, and growth-oriented stock, anticipating a positive re-rating as operations recover and capacity utilization increases.
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About the Company
Petronet LNG Limited is a growing leader in India’s energy sector, has established the country’s first LNG receiving and regasification terminal at Dahej, Gujarat, and another at Kochi, Kerala. The Dahej terminal has a capacity of 17.5 MMTPA, while Kochi handles 5 MMTPA.
Together, these terminals supply about one-third of India’s gas and manage a similar share of LNG imports. Founded as a government-backed joint venture, Petronet LNG involves major Indian oil and gas companies, including GAIL, ONGC, IOCL, and BPCL.
The company’s revenue slipped from Rs.13,415 crore in Q1FY25 to Rs.11,880 crore in Q1FY26, while its net profit slipped from Rs.1,105 crore to Rs.842 crore during the same period. It has a return on equity of 21 percent and a return on capital employed of 25 percent. The company’s P/E ratio is 11.46, compared to the industry average of 20.02.
Written by Jhanavi Sivakumar
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