Valuations are reasonable after the 6 percent fall on September 23 adding that earnings may also rise from tax rate cuts, Jefferies said.
Shares of Petronet LNG gained over a percent intraday on September 24, two days after signing a Memorandum of Understanding (MoU) with US natural gas company Tellurian Inc.
According to the MoU, the company will invest $2.5 billion in Tellurian’s proposed Driftwood LNG export terminal, in exchange for 5 million metric tonne of LNG per year for over 40 years.
The MoU was signed in front of Prime Minister Narendra Modi when he met CEOs of 17 global energy companies in Houston.
Global research firm Jefferies has maintained a buy rating on Petronet LNG with a target of Rs 315 per share. It believes that valuations are reasonable after the 6 percent fall on September 23 adding that earnings may also rise from tax rate cuts. The MoU signed with Tellurian will have direct exposure of only $0.5 billion.
Another broking firm, Kotak Institutional Equities, also has a buy rating target price of Rs 320 per share. Transaction contingent on back-to-back off-take contracts may substitute RasGas volumes.
Kotak is of the view that diversification risks may worry investors while prudence in de-risking biz and evaluating investments is comforting.
At 1037 hrs, Petronet LNG was quoting at Rs 255.05, up Rs 2.30, or 0.91 percent. It has touched an intraday high of Rs 264.85 and an intraday low of Rs 253.70.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
