Petronet LNG Gains Attractive as Target Price Set at Rs 310 by Prabhudas Lilladher

Petronet LNG Reports Mixed Quarterly Performance

Petronet LNG's latest research report by Prabhudas Lilladher reveals a mixed performance for the quarter. Total volume growth of 6.8% year-over-year (YoY) was driven by higher third-party volumes, partly offset by a 24.6% YoY decline in long-term volumes. However, the company experienced a decline of 6.0% quarter-over-quarter (QoQ) in total volumes.

Key Financial Highlights

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

The adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) remained flat QoQ and increased 6.8% YoY to INR13.7 billion, supported by higher gross margins of INR16.9 billion. This included inventory and trading gains of INR1.0 billion and INR1.2 billion, respectively. The adjusted Profit After Tax (PAT) stood at INR8.4 billion, declining 16.3% QoQ and remaining flat YoY.

Capacity and Capex Plans

Following the commissioning of a 5 million metric ton per annum (mmtpa) expansion at Dahej, the company's total capacity now stands at 22.5 mmtpa. The capital expenditure (capex) plans remain on track, with FY27 capex guided at INR90 billion (including INR75 billion for the petrochemical project). The expansion of LNG storage capacity and supply diversification remain key areas of focus.

Contract Updates and Outlook

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The company has commenced a new contract with Exxon in April 2026, while the contract with Equinor is expected to commence in May 2026. We expect volumes of 16.1 mmtpa in FY27E, driven by lower utilization at Dahej in Q1FY27. Volumes are projected to recover to 18.6 mmtpa in FY28E, as cargo normalization takes place.