Petronet LNG reported an EBITDA of ₹15.3 billion for the quarter, which is 18% higher than the analysts’ estimate and 32% higher than the same period last year. The strong performance was largely due to inventory gains of ₹1.9 billion and trading gains of ₹3.1 billion.
When adjusted for additional UoP‑related provisioning and waivers of ₹420 million and ₹588 million, the EBITDA would have been 25% above the forecasted figure.
Net profit after tax (PAT) stood at ₹11.3 billion, a 28% increase over the expected value and a 33.2% rise year‑on‑year. This profit surge reflects the company’s operational efficiency and market conditions.
Adjusting for the same UoP provisioning, waivers, and recovery impacts, the PAT would have been 40% higher than the analysts’ estimate.
Total volumes for the quarter were 207 tbtu, which is 7% below the estimated volume.
With a price‑to‑earnings ratio of 11.6 times FY27E earnings and a dividend yield of about 3.4%, the stock appears undervalued. The discounted cash flow model gives a target price of ₹362, based on a weighted average cost of capital of 11.5% and a long‑term growth rate of 2%.
The model assumes a 5% tariff reduction at the Dahej terminal in FY28, followed by a 4% increase for both terminals. It also incorporates the full capital expenditure for the petchem plant and values the company conservatively at half of FY29E price‑to‑book, then discounts back to FY27.
Overall, the research suggests that Petronet LNG’s recent earnings beat, coupled with attractive valuation multiples, makes it an appealing investment opportunity for long‑term shareholders.