Buy Petronet LNG, target Rs 320: Sharekhan
Sharekhan has a buy call on Petronet LNG with a target price of Rs 320.
The current market price of Petronet LNG is Rs 232.75.
Time period given by the brokerage is one year when Petronet LNG price can reach defined target.
"We remain confident on earnings visibility for PLNG, given the rising share of contracted volume in the overall volume mix. Given our expectation of strong earnings CAGR of 18 per cent over FY2017-FY2020E and a resilient return on equity (RoE) of 22-24 per cent, we believe that PLNG is trading at an attractive valuation of 15.5x FY2019E EPS and 12.3x FY2020E EPS. Thus, we maintain our Buy rating on the stock with unchanged target price of Rs 320. However, regulation of re-gas tariffs by PNGRB and lower-than-expected utilisation rate at Dahej and Kochi LNG terminals are key risks to our rating" Sharekhan said in a report.
The current market price of Petronet LNG is Rs 232.75.
Time period given by the brokerage is one year when Petronet LNG price can reach defined target.
"We remain confident on earnings visibility for PLNG, given the rising share of contracted volume in the overall volume mix. Given our expectation of strong earnings CAGR of 18 per cent over FY2017-FY2020E and a resilient return on equity (RoE) of 22-24 per cent, we believe that PLNG is trading at an attractive valuation of 15.5x FY2019E EPS and 12.3x FY2020E EPS. Thus, we maintain our Buy rating on the stock with unchanged target price of Rs 320. However, regulation of re-gas tariffs by PNGRB and lower-than-expected utilisation rate at Dahej and Kochi LNG terminals are key risks to our rating" Sharekhan said in a report.
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