Petronet LNG, a major player in the LNG industry, recently reported its Q2-FY25 financial results, showing a 3.9% year-on-year increase in consolidated revenue to ₹13,024 crore. This growth was driven by strong volume performance, particularly at its Dahej terminal. The company processed 225 trillion British thermal units (TBTU) of LNG in the quarter, representing a 7.1% increase from the same period last year.
Although there was a slight decline in EBITDA by 1.0% year-on-year to ₹1,202 crore, the EBITDA margin narrowed by 50 basis points to 9.2%. However, the company’s expansion project at the Dahej terminal, expected to be completed by March 2025, is likely to increase its capacity by 5 MMTPA.
Furthermore, the resolution of the Kochi terminal’s pipeline connectivity issue, anticipated by March/April 2025, is expected to drive higher utilization levels and demand from city gas distribution projects in southern Indian cities. The company is also making progress on its petrochemical project, which, along with expected improvements in utilization at both terminals, should support margins.
Given these factors, analysts recommend an Accumulate rating on Petronet LNG, with a revised target price of ₹393, based on 14.1x FY26E adjusted EPS. Investors can look forward to potential growth opportunities in the LNG sector as the company continues to expand its operations and improve its infrastructure to meet the growing demand for natural gas in India.
