PETRONET - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 4.1

📊 Core Financials Analysis

Profitability

ROE: 21.4% and ROCE: 26.2% — strong return metrics, indicating efficient capital deployment.

EPS: ₹24.2 — solid earnings per share, supporting valuation.

PAT Qtr: ₹851 Cr vs ₹1,070 Cr — a 25.5% decline, likely due to seasonal or operational factors, but still robust.

Balance Sheet & Cash Flow

Debt-to-equity: 0.14 — low leverage, enhancing financial flexibility.

Dividend Yield: 3.58% — attractive for income-focused investors.

Historically strong cash flows and consistent dividend payouts position Petronet as a stable performer

1

.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 11.6 Undervalued vs industry PE of 20.2

P/B Ratio ~2.17 Reasonable given ROE and asset base

PEG Ratio 2.24 Slightly overvalued relative to growth

Intrinsic Value ₹295–₹310 (est.) Current price slightly undervalued

🧠 Business Model & Competitive Edge

Company Profile: Petronet LNG Ltd is India’s leading importer of liquefied natural gas (LNG), operating key terminals at Dahej and Kochi.

Strengths

Strategic importance in India’s energy infrastructure.

Long-term contracts with global suppliers ensure supply stability.

High operating margins and strong asset base.

Challenges

Sensitivity to global LNG prices and regulatory shifts.

Recent downward revisions in sales outlook suggest cautious near-term sentiment

1

.

📈 Technical & Sentiment Overview

RSI: 51.4 — neutral zone, no strong momentum.

MACD: -0.96 — mild bearish signal.

DMA 50 & 200: Price below both — consolidation phase.

Volume: Slightly below average — subdued interest.

FII/DII Holding: Mixed — FII uptick, DII reduction.

💡 Entry Zone & Long-Term Guidance

Suggested Entry Range: ₹270–₹285 — near support and below intrinsic value.

Holding Strategy

Ideal for long-term investors seeking stable cash flows and dividend income.

Price targets for 2026–2027 range from ₹337 to ₹422 based on projected earnings

2

.

Monitor LNG demand trends and regulatory developments.

Petronet is a classic value play in India’s energy landscape — low valuation, strong fundamentals, and a reliable dividend stream. If you're building a portfolio with defensive and income-generating assets, this one fits the bill. Want to compare it with GAIL or IGL next?

1

www.marketscreener.com

2

www.stocks-buy.com

Edit in a page