Petronet LNG Limited - Green India with Clean Fuel

[saurabhgupta]

Shri. Akshay Kumar Singh, MD & CEO, Petronet LNG Limited said “the existing long-term agreement
between Petronet LNG & QatarEnergy today accounts for around 35% of India’s LNG imports and is of
national importance. Renewal of this agreement is a step towards achieving vision of Hon’ble Prime
Minister of India to make India a gas-based economy and increase share of natural gas in India’s primary
energy basket to 15% by year 2030. This agreement will provide energy security and ensure stable &
reliable supply of clean energy and help India in its stride towards greater economic development.”
He further added that the long-term LNG purchase agreement with QatarEnergy will further strengthen the
existing relationship between the two Companies.

[Hemant_Kumar2]

Globally gas field finds and production are on an uptick and ESG conscious exploration companies are reorienting their investment portfolio towards gas as demand for the same is projected to grow.
I believe gas prices will remain range bound (barring a few seasonal aberrations) and competitive compared to coal. Latest gas discovery in India should be a shot in the arm for India’s aspiration to improve consumption of gas (a much cleaner fuel than coal) as an energy source.

Disc- Recent investor in Petronet after Q3 results.

ONGC makes two significant gas discoveries in Mahanadi basin block

[Mayank_Jham]

]GAIL Plans to Double Capacity at Its Dabhol LNG Terminal - The Economic Times

[gsapte]

@gsapte

This stock has a tendency in the past to remain range bound for long periods, and then it rises sharply. You can check this on screener.in as well.
In FY23, there was good increase in Sales and Profits in first 2-3 quarters but still stock price was stagnant. Now in the last quarter, there have been reduction in PAT. OPM has reduced from earlier 11% to 7% in Q4 FY23, which seems to be the lowest OPM in past few years.
I believe that, with some capacity expansion happening, and inflation being stable, OPM should revert back to Mean in next few quarters.

I consider this as a low growth moderate Dividend Yield stock, and it looks undervalued in this stretched market.

Stock Price often takes it own time to reflect some of these fundamentals.

Disc: Holding.

My thesis of stock price making sudden rise after some interval has played out.

P/B has reverted to the Mean P/B of about 3.5 in the past few months. There is no major improvement in OPM as this is a Low Margin business. Further upside will depend on various factors and look limited.

[Ravi_Visvanathan]

Valuable inputs. Thanks.

[Hemant_Kumar2]

Contribution of natural gas to world’s energy mix is growing rapidly and India wants to expand its gas consumption also. In addition LNG capacity addition globally is also expanding while LNG trades are becoming increasingly liquid. Given that we don’t have vast gas resources to go with, our reliance on LNG will only increase, and Petronet is going to be a key player in India’s push for cleaner Energy.

What I see in Petronet is a virtual monopoly, high ROE, profitable and cash rich business available at an enterprise value x 9 times EBITDA and market cap almost at sales value. It’s very hard to find such businesses in a sunrise sector at such cheap valuations.

In my view, stock is way undervalued and at forward earning basis, still trading below it’s historical averages while rest of the PSU pack has seen major rerating. There is a lot of juice left in this counter.

[Arka]

PETRONET LNG | Q3 CONCALL

Expect Dahej Capacity Utilisation To Improve

Expect Capacity Utilisation To Remain Stable Post Capacity Expansion

In Talks With Off-Takers To Book Capacity With Our Terminals

Already Informed All Off-Takers On Use Or Pay Charges: Expect Reply By March 31

Will Be Invoking Bank Guarantees

[Janme]

As per the recent report from Petroleum & Natural Gas Regulatory Board, LNG terminals are headed for over capacity as the demand is not growing. Also there is the risk of regulations in tariffs charged by terminal operators.

20241231_CSR.pdf