Live news , top stories, corporate news, company news, sector news, economy news, results analysis news, ceo interviews, fund manager interview, advisor interview, market news, bazaar talk, hot stocks news, ipo news, commodities news, mutual fund news, insurance news, news wire
05 March, 2015 20:02 IST
`Buy` Petronet LNG; target Rs 230: Nomura
Source: IRIS Exclusive | 06 Feb, 2012, 08.15AM
Comments  |  Post Comment

Nomura Financial Advisory & Securities has recommended `Buy` on Petronet LNG with a price target of Rs 230 as against the current market price (CMP) of Rs 161 in its report dated Jan. 31, 2012. The broking house gave the following rationale:

PLNG continues to surprise on volumes and earnings. 3Q volumes hit an all-time high, and earnings were 15% ahead of Bloomberg consensus. With domestic gas volumes declining, spot LNG prices moderating, demand remaining strong, and most important, PLNG adding most of the near-term incremental capacity, PLNG`s outlook seems only brighter to us. We again raise our FY12F/13F/14F EPS estimates by 14-15%. Even as we are already 10-12% ahead of the Street for FY13/14F, we think PLNG may still surprise. Our new target price is Rs 230 on our revised estimates.

Catalysts: Early tie-up of new capacity; import duty cut:

We have been expecting that PLNG would be a key source of new gas in the near to medium term. With KG-D6 output continuing to decline, demand for LNG has become even stronger. After a long time, India is now signing long-term LNG contracts again GAIL`s 3.5mmtpa contract in December 2011 is likely just the beginning, as advanced discussions are ongoing for several more. With its capacity expansion being most advanced among upcoming projects, PLNG`s new capacity is likely to be contracted soon, in our view. The site for the East Coast terminal is also finalised for future growth. The Oil Ministry`s demand for removal of the 5% import duty, if accepted in the budget, would also be a positive. 

Valuation: Strong performance in 2011, may repeat in 2012F:

PLNG was our preferred pick for 2011. Despite its outperformance (up 25%; Sensex down 25%), we see significant upside. After sharp earnings growth (53% in FY11; likely 73% in FY12F), however, we see momentum slowing in the near term until its new capacity comes online. PLNG is in the most advanced stages for capacity increases and in our view should remain the key gateway for incremental LNG imports in the medium term.

Click here to view full report

Disclaimer: IRIS has taken due care and caution in compilation of data for its web site. Information has been obtained by IRIS from sources which it considers reliable. However, IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website.



Petronet LNG Limited   (Q,N,C,F)*

Comments Post comment 
 Post Comment
Name Email
Comment
Security Code type    into this box
Related Articles
FIIs can invest up to 34% in Container Corporation - 05-Mar-2015 18:44
BEML rolls out country's biggest dump truck - 05-Mar-2015 17:45
ICICIdirect selects Tech Mahindra as techno-funda pick - 05-Mar-2015 16:35
Tele2 and HCL Technologies form strategic alliance - 05-Mar-2015 15:52
ONGC's oil production from its western offshore breaks 5 years record - 05-Mar-2015 13:07
NTPC commissions Barh Thermal Power Project - 05-Mar-2015 12:31
Tech Mahindra strengthens footprint in Vietnam - 05-Mar-2015 11:38
Aban Offshore arms redeem outstanding bonds worth Rs 13.35 bn - 05-Mar-2015 09:52
Aban Offshore arms redeem outstanding bonds worth Rs 13.35 bn - 05-Mar-2015 09:52
Axis Bank raises USD 250 mn via overseas bonds - 05-Mar-2015 09:48
Reliance Infra acquires Pipavav Defence - 05-Mar-2015 09:19
more...
Home  |   Shares  |   F&O  |   Mutual Funds  |   Loans  |   Insurance  |   News Centre
Wealth Tracker  |   Newsletters  |   Tax Corner  |   NRI Centre  |   Advertise
© All rights reserved. IRIS Business Services Limited
A Disclaimer