According to the brokerage, Petronet LNG’s earnings momentum is expected to improve on the back of better volumes following the commissioning of the 5 million tonnes per annum Dahej expansion in March.
JPMorgan also cited the 5% tariff escalation and lower impairment costs as key positives. The reduction in impairment costs could also lead to upgrades in consensus earnings estimates for FY28.While the brokerage flagged potential renegotiation of Dahej tariffs and risks arising from large PDH capital expenditure as key valuation concerns, it said these issues are likely to remain unresolved for some time.
In the interim, JPMorgan believes improving earnings should support the stock.Separately, Citi had flagged regulatory risks for Petronet LNG in a recent note, warning that changing regulatory and competitive dynamics could shift bargaining power in favour of the company’s offtakers.
Citi said the Petroleum and Natural Gas Regulatory Board, in a recently published discussion paper, analysed costs across the gas value chain, including upstream, transmission, marketing, regasification and taxation. The regulator has made recommendations around modifications to administered price mechanism allocation, tax rationalisation and regulation of regasification.
According to Citi, these developments underscore PNGRB’s view that regasification terminals should be brought under a formal regulatory framework through the regulation of regasification tariffs.
Currently, 33 analysts track Petronet LNG. Of these, 15 have a ‘Buy’ rating on the stock, while nine each recommend ‘Hold’ and ‘Sell’.
Shares of Petronet LNG were trading 3.09% higher on Friday at ₹291.90.
