1:1 Bonus, 25 Dividends In 18 Yrs: Buy PSU Oil & Gas GAIL-Backed LNG Stock Ahead Of Q3 Results? Find Out!

Petronet LNG is a PSU company backed by four giant oil and gas companies, which are backed by the government. Petronet will be in focus on Monday, January 27, due to its Q3 results. The company has witnessed broader selling pressure and fallen by over 7% year-to-date. Petronet is expected to report double-digit growth in its EBITDA sequentially in Q3FY25.

ONGC, GAIL, and Indian Oil, among the largest oil and gas companies, hold 12.50% each in Petronet LNG. BPCL, also a leading OMC, holds 12.50% in Petronet. The other 50% of equities in Petronet LNG are backed by the Public, FIIs, FPIs, Mutual Funds, etc.

Petronet LNG Share Price:

On January 24, last week, the PSU stock stood at Rs 322.55 apiece on BSE with a market cap of Rs 48,382.50 crore. The stock had dipped by 2.4% at that time. Despite the last decline, Petronet's weekly performance is up by 1.24%. However, year-to-date, the stock has dipped by 7.07%.

So far, the LNG distributor has rewarded its investors with bonus shares and dividends in a span of 18 years.

Bonus Issue: The company delivered its first bonus of a 1:1 ratio in July 2017. Since then, the company has not paid any bonus.

Petronet has also not carried a stock split till now.

Dividends: Since May 2007, the company delivered up to 25 dividends, as per Trendlyne data. The company paid about Rs 10 per share dividend in the last 12 months. Its current dividend yield is at 3.10%.

Petronet LNG Q3 Results Preview:

Petronet has announced that the Meeting of the Board of Directors of the Company will be held on Monday, 27th January 2025, inter-alia, to consider and approve unaudited Financial Results of the Company for the quarter and nine months ended 31st December 2024.

In the third quarter, Prabhudas Lilladher is expecting Dahej utilization to be about 96%, while the total volumes of the company are seen at 226tbtu. Further, Emkay Global also expects 96% Dahej utilization, and 23% Kochi utilization in the Q3FY25. Additionally, Emkay expects a USD3.0/mmbtu spot LNG marketing margin for Petronet.

In its preview report, Kotak Institutional Equities said, "We expect ~10% QoQ increase in adjusted EBITDA (+15% yoy) mainly on likely higher marketing/adventitious gains."

Kotak's note lastly said, "We assume ~Rs1.5 bn provision on past period use-or-pay charges (versus Rs1.8 bn qoq). Reported EBITDA will likely increase 14% QoQ (down 20% yoy, high base boosted by use-or-pay gains for CY2023)."

BUY Petronet LNG Share?

Kotak has recommended selling on Petronet with a target price of Rs 235 apiece. Also, Prabhudas has suggested a SELL with a target price of Rs 268.

As per Trendlyne data, the consensus recommendation from 33 analysts for Petronet LNG Ltd. is HOLD. EPS is expected to grow by 7.5% in FY25. The average 1-year target price is at Rs 331.34 apiece, which hinted at nearly 3% potential upside.

About Petronet LNG:

Petronet LNG Limited is one of the fastest-growing world-class Public Limited Companies in the Indian energy sector. It has set up the country's first LNG receiving and regasification terminal at Dahej, Gujarat with a present nominal capacity of 17.5 MMTPA and another terminal at Kochi, Kerala having a nominal capacity of 5 MMTPA.

Petronet LNG Limited (PLL) was formed on April 2, 1998, as a Joint Venture Company (JVC) having 50% shareholding of leading 4 Oil & Gas PSUs by GOI order dated July 4, 1997. An Independent Board managed JVC was created for the development of facilities for the import, storage and regasification of Liquefied Natural Gas.

The four major shareholders of Petronet are GAIL, BPCL, ONGC and Indian Oil.