Accumulate Petronet LNG; target of Rs 322: Prabhudas Lilladher

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Operational efficiency gains: Petronet LNG reported EBITDA of INR16.6bn, beating estimates, driven by INR6.6bn in operational and commercial efficiency gains.
  • Volume growth: Total volumes increased 11.6% QoQ and 1.3% YoY to 231Tbtu, driven by a sharp increase in 3rd-party volumes.
  • Capacity utilization improvement: Dahej utilization improved to 73% from 66% QoQ, while overall utilization increased to 64% from 58% QoQ.
  • Capex plans: FY27 capex is expected to remain broadly flat vs FY27 at INR90bn, with a similar level of capex expected in FY28.

Thesis Validation Checklist

  • Watch for sustained operational efficiency gains: Investors should monitor if Petronet LNG can maintain its operational efficiency gains, which will be crucial for future earnings growth.
  • Track volume growth: A continued increase in total volumes, especially 3rd-party volumes, will be essential for the company's growth.
  • Monitor capacity utilization: Improvement in capacity utilization at Dahej and Kochi will be vital for the company's future earnings.
  • Keep an eye on capex plans: Any changes in capex plans or execution will be important to monitor, as they can impact the company's future growth prospects.