Petronet LNG Share Price Rises Over 3% Despite Net Profit Decline—Here's Why

Petronet LNG Ltd.'s share price rose on Friday as Dahej terminal's utilisation surprised the Street by surpassing expectations of most analysts. The liquefied natural gas supplier's management was also confident to retain its full utilisation after its 5 million tons per annum capacity is commissioned in March, 2025.

The optimism surrounding the Dahej terminal's utilisation influenced analysts to look past a decline in its net profit during July–September, and retain their outlook on the Petronet LNG share price.

The sequential decline in Dahej utilisation to 98% from 109% was in line with Citi Research's estimates.

Citi Research hiked Petronet LNG's target price to Rs 310 from Rs 290 earlier. The current target price implied a 8.7% downside from Thursday's closing price. The brokerage has a 'Sell' rating on the stock.

The brokerage said Dahej terminal's utilisations is on track after capacity expansion. Petronet LNG is engaging with off–takers for booking incremental capacity. Its Kochi–Bengaluru pipeline is now expected to be completed by March 2025, Citi Research said in a note on Thursday.

The brokerage lowered Petronet LNG's Ebitda estimate for financial year 2025 by 6%, while it raised the operating profit estimates by 7%, pricing in higher volumes, the brokerage said.

Dahej terminal's utilisation beat Emkay Global Research's estimates along with operating profit estimates. The brokerage has 'Buy' rating on the stock with Rs 425 target price. The current target price implied a 25.17% upside from Thursday's closing price.

Nuvama kept the target price on Petronet LNG stock unchanged at Rs 412 with the 'Buy' rating. The current target price implied a 21% upside from Thursday's closing price.

Petronet LNG is likely to benefit from Kochi–Bengaluru pipeline, the long–term fixed quantity use–and–pay contracts with buyers with annual 5% tariff hikes, Nuvama said citing as reasons to retain their view on the stock.

Petronet LNG's Ebitda and net profit declined in July–September because of higher operating expenditure and write offs. The company wrote off receivables worth Rs 71.6 crore, and provisioned Rs 110 crore for use–and–pay receivables, Nuvama said.

• Revenue down 2.9% to Rs 13,024.29 crore versus Rs 13,415.13 crore.

• Ebitda down 23% to Rs 1,202.28 crore versus Rs 1,562.50 crore.

• Margin at 9.2% versus 11.6%.

• Net profit down 21% to Rs 870.61 crore versus Rs 1,105.47 crore.
  
  

Petronet LNG share price rose 3.41% to Rs 356.80 apiece. It erased gains to trade 1.88% down at Rs 338.55 apiece as of 09:26 a.m., as compared to 0.05% advance in the NSE Nifty 50 index.

The stock rose 53.99% in 12 months, and 53.51% on year to date basis. Total traded volume so far in the day on NSE stood at 0.29 times its 30-day average. The relative strength index was at 43.84.

Out of 35 analysts tracking the company, nine maintain a 'buy' rating, 10 recommend a 'hold,' and 16 suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies a downside of 2.6%