PETRONET - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 4.1

📊 Fundamental & Valuation Analysis

Metric Value Interpretation

Market Cap ₹43,920 Cr Mid-cap energy stock

P/E Ratio 11.8 Undervalued vs industry PE of 18.5

PEG Ratio 2.31

1

Slightly overvalued for growth

ROE 21.3%

1

Strong shareholder returns

ROCE 25.6%

1

Excellent capital efficiency

Dividend Yield 3.41%

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Attractive income generation

Debt to Equity 0.13

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Low leverage, financially sound

📈 Price Trends & Technicals

Indicator Value Signal

Current Price ₹280.75

2

Near support zone

52W High/Low ₹384.2 / ₹269.6

2

27% below high

DMA 50 / 200 ₹305 / ₹314

1

Trading below both — bearish

RSI 36.8

1

Near oversold zone

MACD -0.84 Weak momentum

Volume Above average Active interest

🎯 Ideal Entry Price Zone

Given its undervaluation and technical weakness, the ideal entry zone is ₹270–₹285, close to its 52-week low and support levels. This offers a strong margin of safety for long-term investors.

🧭 Holding or Exit Strategy

If you already hold Petronet LNG

Holding Period: Minimum 3–5 years to benefit from LNG infrastructure expansion and stable cash flows.

Exit Strategy

Partial exit near ₹360–₹380 (resistance zone)

Hold if ROE >20% and PEG <2.5

Exit fully if PEG rises above 3 or profit margins deteriorate further

✅ Long-Term Investment Verdict

Pros

Strong ROE/ROCE and consistent dividend

Undervalued on P/E basis

Low debt and stable cash flows

Strategic infrastructure assets in LNG

Cons

PEG ratio >2 suggests growth may not justify valuation

Recent profit decline (QoQ -23.8%)

3

Technicals still weak; price in downtrend

Conclusion: Petronet LNG is a value-oriented long-term candidate with strong fundamentals and income potential. Ideal for conservative investors seeking stability and dividends.

Would you like a dividend-focused comparison with ONGC or GAIL?

1

stockanalysis.com

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bing.com

3

www.indmoney.com

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