Target: ₹393

CMP: ₹340.45

Petronet LNG’s consolidated revenue rose 3.9 per cent y-o-y to ₹13,024 crore in Q2-FY25, supported by robust volume growth, primarily from its Dahej terminal. It processed 225 trillion British thermal units (TBTU) of LNG, a 7.1 per cent y-o-y increase, compared to 210 TBTU processed in Q2-FY24. However, this represents a 9.3 per cent decrease from the 248 TBTU processed in Q1-FY25.

On a consolidated basis, Petronet processed a total of 239 TBTU of LNG in Q2FY25, up 7.2 per cent from the 223 TBTU processed in Q2-FY24, but down 8.8 per cent from the 262 TBTU processed in Q1-FY25.

EBITDA declined a marginal 1.0 per cent y-o-y to ₹1,202 crore, while the EBITDA margin narrowed 50 bps y-o-y to 9.2 per cent.

The expansion project at the Dahej terminal, slated for completion by March 2025, would increase its capacity by 5 MMTPA.

Meanwhile, the resolution of the Kochi terminal’s pipeline connectivity issue, expected by March/April 2025, is expected to boost its utilisation levels and drive demand from city gas distribution projects in southern Indian cities. Furthermore, progress on the petrochemical project and the expected improving utilisation at both terminals should support margins.

Hence, we reiterate Accumulate rating, with a revised target price of ₹393, based on 14.1x FY26E adjusted EPS.