🟢 At a Glance
Petronet LNG imports, stores, and regasifies LNG for India. It owns Dahej and Kochi terminals with 22.5 MMTPA capacity and handles 75% of India’s LNG imports. Yet, this profit machine trades at just 11.5x P/E, pays 3.3% dividend, and throws ₹4,000 Cr+ in annual profit like it’s no big deal.
1. 🎬 Introduction with Hook
While Adani Total gets all the gaslight spotlight, Petronet LNG is sitting quietly, supplying 33% of India’s total gas consumption.
It’s got:
- 2 mega terminals
- Monopoly-like margins
- Backing from IOCL, BPCL, GAIL & ONGC
- ₹773 Cr in other income (because why not)
Yet nobody’s talking about this gas cash cow.
2. 🛢️ Business Model (WTF Do They Even Do?)
✅ Core Biz:
- Importing, storing, regasifying LNG
- Long-term contracts with QatarEnergy, spot deals too
✅ Infra:
- Dahej terminal (17.5 MMTPA) – Gujarat
- Kochi terminal (5 MMTPA) – underutilized but improving
- 2 new tanks added at Dahej (Oct 2024)
✅ Client Base:
- PSU giants (IOCL, GAIL, BPCL)
- Private sector buyers
- Cross-border MoUs (Lanka, Odisha)
🎯 Margin from capacity utilization, infra charges, and regas fees. No raw material price risk = stable cash flows.
3. 📊 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY25 |
|---|---|
| Revenue | ₹50,982 Cr |
| Net Profit | ₹3,973 Cr |
| OPM | 11% |
| ROE | 21.3% |
| ROCE | 25.6% |
| EPS | ₹26.48 |
Consistent margins. Net profit CAGR: 9% in TTM. Gas is volatile; Petronet isn’t.
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹304 |
| P/E | 11.5x |
| P/B | 2.3x |
| Dividend Yield | 3.28% ✅ |
| Book Value | ₹133 |
Fair Value Calculation:
- P/E Range: 13x–15x on FY25 EPS ₹26.48
- Fair Value = ₹344 – ₹397
So yeah, it’s trading at a 10–25% discount with a yield that beats NPS, PPF, and your fixed deposit uncle.
5. 🔥 What’s Cooking – News, Triggers, Drama
🛠️ Recent Highlights:
- ✅ Commissioned 2 new LNG tanks at Dahej
- ✅ Long-term 7.5 MMTPA LNG deal signed with QatarEnergy
- ✅ Signed MoU with Sri Lanka’s LTL Holdings
- ✅ ₹20,685 Cr petrochemical project approved (high capex, but high ROCE expected)
- ✅ New CFO: Saurav Mitra appointed in April 2025
🚨 Risks: GST demand of ₹33.68 Cr, regulatory warnings from NSE (PAN compliance), and underutilized Kochi terminal.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Net Worth | ₹19,878 Cr |
| Borrowings | ₹2,657 Cr |
| Debt/Equity | 0.13x ✅ |
| Fixed Assets | ₹8,836 Cr |
| CWIP | ₹1,642 Cr |
Capex continues, but debt is very manageable. Plus ₹1,712 Cr in investments = cushion for days.
7. 💵 Cash Flow – Sab Number Game Hai
| Metric | FY25 |
|---|---|
| Cash from Ops | ₹4,398 Cr |
| Cash from Investing | -₹3,189 Cr |
| Cash from Financing | -₹2,152 Cr |
| Net Cash Flow | -₹942 Cr |
Despite negative free cash flow due to expansion + dividends, operations throw enough cash to sleep well at night.
8. 📊 Ratios – Sexy or Stressy?
| Ratio | Value | Comment |
|---|---|---|
| ROCE | 25.6% | Capital efficient AF |
| ROE | 21.3% | Shareholder friendly |
| Dividend Payout | 38% | Consistent over time |
| Debtor Days | 23 | Clean collections |
| Working Cap Days | 18 | No stress zone |
👑 These are FMCG-level returns in a utility infra biz.
9. 📈 P&L Breakdown – Show Me the Money
FY25 P&L Summary:
- Revenue: ₹50,982 Cr
- EBITDA: ₹5,524 Cr
- Net Profit: ₹3,973 Cr
- Other Income: ₹773 Cr
- Net Margin: 7.8% (stable)
Cash cows don’t moo this consistently.
10. 🆚 Peer Comparison – Who Else in the Game?
| Company | P/E | ROE % | Div Yld | OPM % | Comment |
|---|---|---|---|---|---|
| Adani Total Gas | 109x | 16.8% | 0.04% | 22.7% | Crazy valuations, low yield |
| IGL | 18.2x | 16.9% | 2.0% | 13.2% | Good margins, steady growth |
| MGL | 14x | 18.9% | 2.0% | 21.8% | Mumbai monopoly, solid yield |
| Petronet LNG | 11.5x | 21.3% | 3.28% | 11% | Best yield, most coverage ✅ |
Petronet is India’s LNG backbone, not some gas cylinder start-up.
11. 📦 Miscellaneous – Shareholding, Promoters
| Category | % Holding |
|---|---|
| Promoters | 50.00% |
| FIIs | 28.77% |
| DIIs | 11.18% |
| Public | 10.05% |
✅ Super stable promoter backing (GAIL, IOCL, BPCL, ONGC)
📈 FIIs are holding, not dumping
🏦 Public holding is only 10% — this is still an institutionally loved stock
12. 🧑⚖️ EduInvesting Verdict™
Petronet LNG is:
✅ A cash-spewing monopoly
✅ Debt-light, infra-heavy
✅ Yielding better than 3-year FDs
✅ Trading at ~11x P/E
And yet… it gets zero hype.
Why? Maybe because it doesn’t have “Adani” or “Green Hydrogen” in the name. But as India’s gas demand grows (especially for industrial and city gas distribution), Petronet remains central to the entire ecosystem.
Verdict:
“This ain’t a growth rocket. But it’s a dividend cruise missile. And it’s always loaded.” 🚢💣
💰 Fair Value Estimate (EduInvesting™ Model)
- FY25 EPS = ₹26.48
- Target P/E Range = 13x–15x
- Fair Value Range = ₹344 – ₹397
At CMP ₹304, this gas pipeline stock may not explode—but it surely pays you while it waits.
✍️ Written by Prashant | 📅 9 July 2025
Tags: Petronet LNG, gas stocks India, dividend yield stocks, LNG terminal, Dahej, Kochi, PSU joint ventures, infra cash flow, FII holding, undervalued midcap
