Petronet LNG Ltd. share price target

Petronet LNG (PLNG) has reported 47% YoY decline in its adjusted EBITDA to Rs9bn (down 22% QoQ) and 64% YoY dip in net adjusted earnings to Rs4.1bn in Q3FY23, well below I-Sec estimates of Rs12.2bn EBITDA and Rs7.9bn PAT. YoY earnings decline was due to a 38% YoY dip in service volumes and lower trading gains.

We upgrade Petronet LNG (PLNG) to HOLD from REDUCE, in light of muted valuations and our assessment that the worst is behind for earnings and operations for the company. We revise TP to Rs210/sh, with FY24E EPS raised by ~2.8%.

Near-term volumes remain stressed, specifically with respect to third-party Regasification volumes which were based on spot LNG contracts. Of the 17.5mt capacity, 8.25+4mt or 12.25mt is based on long-term contracts, which remains unaffected by the extreme price volatility seen in spot LNG prices in the last six months.

Petronet LNG (PLNG) has reported 14% YoY decline in EBITDA to Rs11.7bn (up 10% QoQ) and 10% YoY dip in net adjusted earnings to Rs7.4bn in Q2FY23, above our estimates of Rs9.4bn EBITDA and Rs5.8bn PAT.