Buy Petronet LNG; target of Rs 205: Firstcall Research

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Firstcall Research report on Petronet LNG“Petronet LNG incorporated on April 2, 1998 and commencement of commercial operations from April, 2004. Petronet LNG Limited engages in the import, regasification, and supply of liquefied natural gas (LNG) in India. The company owns and operates LNG regasification terminal with the name plate capacity of 10 MMTPA at Dahej in the state of Gujarat. It supplies LNG primarily to Bharat Petroleum Corporation Limited, GAIL (India) Limited, and Indian Oil Corporation Limited. Petronet LNG is also drawing keen interest from global energy industry stars. While French national gas company Gaz de France (GDF) is the strategic partner, Ras Laffan Liquefied Natural Gas Company Limited, Qatar, has signed an LNG sale and purchase agreement (SPA) with the company for the supply of LNG to India.”“At the current market price of Rs.178.10, the stock P/E ratio is at 17.86 x FY15E and 16.48 x FY16E respectively. Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.9.97 and Rs.10.80 respectively. Net Sales of the company is expected to grow at a CAGR of 20% over 2013 to 2016E respectively. On the basis of EV/EBITDA, the stock trades at 8.35 x for FY15E and 7.54 x for FY16E. Price to Book Value of the stock is expected to be at 2.33 x and 2.04 x respectively for FY15E and FY16E. We recommend ‘BUY’ in this particular scrip with a target price of Rs.205.00 for Medium to Long term investment,” says Firstcall Research report.  

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