Petronet LNG Q4 results: Here’s what brokerages have to say

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Petronet LNG is close to our bear case valuation and remains among the most attractive value stocks in India, CLSA said.

Petronet LNG Q4 results: Here’s what brokerages have to say
Petronet LNG reported a sequential fall in net profit for the fourth quarter of fiscal 2021, while the revenue increased. The company's net profit in Q4FY21 was at Rs 637.92 crore as against a net profit of Rs 882.05 crore for the quarter ended December 31, 2020. Total income during the quarter rose to Rs 7,624.47 crore from Rs 7,427.90 crore, QoQ.
The company has a capital expansion plan of almost Rs 40,000 crore in the coming five years.
Here's what brokerages have to say on Petronet LNG's Q4 performance and stock:
CLSA
Petronet LNG’s 4QFY21 net profit was 21 percent below our estimate on the back of a 10 percent volume miss, higher Opex and lower other income. Petronet LNG is close to our bear case valuation and remains among the most attractive value stocks in India, CLSA said.
Volume headwinds in H1FY22 see us lower our FY22 EPS of 9 percent, CLSA added. It maintained a buy rating with a target price of Rs 270 per share.
Credit Suisse
The brokerage maintained an outperform rating with a target price of Rs 270 per share. The phase of high capex will start, but the stock looks attractive at 9x FY23e EPS, the brokerage said.
It expects utilisation from the Dahej plant to be lower in Q1FY22 and said that the improvement in utilisation at Dahej and Kochi were catalysts. It cut FY22 EPS by 6 percent to account for lower volumes in H1FY22.
Citi
Citi downgraded the stock to a neutral rating and slashing the target price to Rs 260 per share from Rs 325 per share earlier as it sees headwinds to near-term LNG demand. Aggressive capex plans are also seen as headwinds. Citi lowered FY22-23 earnings by seven to nine percent.
Motilal Oswal
We are positive about the company as the market share of gas in the primary energy mix is a meagre six percent and is expected to double by CY30 primarily from the development of new CGDs and increased consumption by Fertilizer and refining/petchem plants, Motilal Oswal said.
It reiterated a buy call and has a target price of Rs 310 per share.
Emkay Global
The brokerage cuts FY22/23E EPS by 13 percent/11 percent, assuming lower volumes and Kochi tariffs. It lowered the target price by 15 percent to Rs 290 and maintained a buy call but with an equal-weight stance.
Management stated Rs 52 billion of core capex in the next five years, along with Rs40bn/80bn in compressed biogas/LNG retail, which are promising sectors but with low earnings visibility. Weak Q1FY22 utilisation and offtakers asking for Dahej tariff in Kochi are dampeners Emkay Global said.
At 1:00 pm, the shares of Petronet LNG were trading 1.09 percent higher at Rs 231.05 apiece on the BSE.

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