Concerns over long-term growth cast shadow on Petronet LNG

• Posted in OilGas
• on March 31, 2023
• No Comments.

Although the near-term prospects of Petronet LNG (Petronet) look encouraging, growth, in the long run, appears a bit grim. The stock performance has also been underwhelming.

The company’s scrip has generated a return of a mere 2 percent in the past month and 4 percent YTD. In the past three years, it is up 16 percent.

Brokerage house Sharekhan said the stock offers a decent dividend yield of 5-6 percent, and it trades at an attractive valuation of 9.4 times its FY24 EPS or earnings per share and 8 times of FY25 EPS given earnings visibility and RoE (return on equity) of 22 percent.

About the company

Petronet imports, stores and sells regasified liquefied natural gas (LNG) in the domestic market. It accounts for around 40 percent of gas supplies in the country and its ports handle around two-thirds of LNG imports.

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