HDFC Securities has upgraded Petronet LNG to 'Buy' with target price of Rs 205 in its report.

Petronet LNG's 3Q EBITDA was below estimates at Rs 3.4 billion (-34% QoQ), led by lower spot volumes and lower marketing margins (a sharp fall in spot LNG prices resulted in inventory losses). Total volumes declined to 141 tbtu (-6% QoQ). Consequently, PAT declined by 38% to Rs 1.6 billion.

Commenting on the investment rationale, the stock broker said, ''We have cut our estimates for FY16/17E by 13/18% factoring lower profits in the spot biz. However, we upgrade Petronet LNG to Buy with a TP of Rs 205/sh on the back of attractive valuations and long term drivers being in place.''

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