Petronet LNG shares climbed significantly on Friday, January 9, following a bullish upgrade from JPMorgan. The investment bank elevated Petronet LNG to 'Overweight' and set a new price objective at ₹335 per share, representing an upside potential of approximately 18% from current trading levels. According to reports, shares were up 3.09% at ₹291.90 during Friday's trading session, reflecting strong investor response to the upgraded outlook.
JPMorgan analysts pinpoint the commissioning of the 5 million tonnes per annum Dahej expansion, expected in March, as a primary volume driver for the company's strengthening earnings momentum. The brokerage highlighted 5% tariff escalation and reduction in impairment costs as additional supportive financial factors. These developments could potentially lead to upward revisions in consensus earnings forecasts for FY28, with JPMorgan viewing the combination of these factors as creating a solid foundation for improved financial performance.
While maintaining an optimistic outlook, JPMorgan acknowledged potential headwinds including renegotiation of Dahej tariffs and substantial capital expenditure for PDH projects as key valuation concerns. However, the brokerage noted that these issues are unlikely to be resolved quickly. JPMorgan believes that improving earnings performance in the interim will provide solid support for the stock, suggesting that near-term fundamentals should drive positive momentum despite longer-term uncertainties.
Separately, Citi has flagged regulatory risks from the Petroleum and Natural Gas Regulatory Board's (PNGRB) recent discussion paper, which scrutinizes costs across the gas value chain including upstream, transmission, marketing, regasification and taxation. According to Citi's analysis, changing regulatory and competitive dynamics could shift bargaining power in favour of the company's offtakers. The brokerage noted that these developments underscore PNGRB's recommendation for formal regulation of regasification tariffs, potentially bringing regasification terminals under a structured regulatory framework.
The analyst consensus shows 33 firms tracking Petronet LNG with mixed recommendations reflecting varied perspectives on the company's prospects. According to available data, 15 analysts maintain a 'Buy' rating on the stock, while nine each recommend 'Hold' and 'Sell' respectively. This distribution highlights the divergent views among market participants regarding the company's near-term prospects amid both growth opportunities from capacity expansion and regulatory uncertainties in the regasification sector.
