Hold Petronet LNG; Prabhudas Lilladher's goal is Rs 208

 Hold Petronet LNG; Prabhudas Lilladher's goal is Rs 208

In its research report dated October 31, 2023, Prabhudas Lilladher suggested holding Petronet LNG with a target price of Rs 208.

The Petronet LNG study report by Prabhudas Lilladher

Petronet LNG announced a PAT of Rs 8.2 billion (up 4% QoQ, Ple: Rs 6.7 billion) and an EBITDA of Rs 12.1 billion (up 3% QoQ, Rs 10.5 billion). At 223 Tbtu, total volumes were up 15% YoY but down 3% QoQ. Even though volumes grew YoY, the company's long-term volume growth prospects are still poor because of competition from new LNG terminals and an increase in the supply of local gas. The business declared a capex of Rs 206.9 bn on a PDH-PP petrochemical plant. It now has cash of Rs 18.2 bn and a bank balance of Rs 60.1 bn.

Prospects

This, in our opinion, will put strain on the financial sheet of the business and probably lower its ROCE. We have changed our recommendation from "Buy" to "Hold" with a TP of Rs 208 based on 11x FY26 P/E as a result of these factors.