Please refer to important disclosures at the end of this report
Petronet LNG Limited (PLL) is engaged in sale of re-gasified liquefied natural gas
(RLNG). Currently, Dahej terminal is booked for 7.5 MMTPA under RasGas long
term volumes while an additional 8.25 MMTPA is booked as regasification
capacity, taking the count to more than the current nameplate capacity of 15
MMT. Recent media reports suggest retaliation by locals against Gail’s
construction of its Kochi-Mangalore pipeline. However, with government and
judicial support, the project is expected to conclude as per schedule by end-
2018. Completion of the pipeline project will boost utilisation of Petronet’s Kochi
terminal, which is currently under-utilised on account of lack of pipeline
connectivity. Going forward, the company could receive additional 11.5 mmtpa
of gas if the pipeline work gets completed on schedule. On the front of Dahej
expansion, the board has invited EPC bids for setting up additional capacity of
2.5 MMT. The Dahej expansion to 17.5 MMTPA is expected to be completed by
2019. It has reported revenue and bottom line growth of 2% & 9% respectively
from 2012-17 but its operating margin has improved from 8.4%in FY12 to 17%
in FY17.PLL has been maintaining average dividend payout of 17.12% since last
5 years and cashflows has improved from `1253.73cr in FY12 to `2067.58cr in
FY17. PLL’s back-to-back LNG purchase-sales agreement provides comfort on
the business model. It remains a structural story of India’s increasing gas
demand. With India continuing to be significantly short of natural gas supply, PLL
will benefit as the primary play on increasing usage of LNG. The company has a
ROE of 20.77% and it is currently trading at a valuation PE of 19.20x of TTM
earnings. Hence BUY.
CMP `242
Reuters Code
BSE Sensex
Face Value (`)
Oil Marketing& Distri.
Market Cap (` cr)
52 Week High / Low
Avg. Daily Volume
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Petronet LNG Ltd
Others | Oil Marketing & Distribution
Dec 01, 2017
Petronet LNG Ltd |Oil Marketing & Distribution
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Petronet LNG
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)