This midcap oil & gas stock falls over 2%; should you buy, hold or sell it?

Shares of Petronet LNG-the country’s largest liquified natural gas importer- in Thursday’s session swung between gains and losses in early trade as the company reported its Q4 earnings on the previous day.

After clocking nearly 1 per cent gains, shares of the oil and gas company fell over 2 per cent to day's low price of Rs 302.75 per share on the BSE.

For the reporting quarter, the company’s net profit recorded a 20 per cent surge year-on-year (YoY) to Rs 738 crore on the back of importing higher LNG volumes. Nevertheless, the profit slumped sequentially by a significant 38 per cent. In the preceding December quarter, the company’s net profit came in at Rs 1,191 crore, while in Q4FY23 it stood at Rs 614 crore. 

Zee Business research desk estimated the company’s PAT to come in at Rs 812 crore.

During the current quarter ended March 31, Petronet's mainstay Dahej terminal in Gujarat processed 219 trillion British thermal units (TBTU) of LNG as against 218 TBTU during the previous quarter ended December 31, 2023 and 172 TBTU during the corresponding quarter of the previous fiscal.

The company’s margins also took a hit sequentially and came in lower at 8 per cent against 11.6 per cent in the preceding December quarter.

The overall LNG volume processed by the company during the January-March period was the highest ever at 234 TBTU, as against the LNG volume processed in the previous and corresponding quarters, which stood at 232 TBTU and 185 TBTU, respectively.

"The company was able to achieve robust financial results riding on stable LNG prices and achieving efficiency and optimization in its operation," MD & CEO Akshay Kumar Singh said.

Should you buy, hold or sell Petronet LNG shares post Q4FY24 results?

Global brokerage Morgan Stanley maintains an ‘overweight’ view on the counter and suggests a target of Rs 239.  As per the brokerage, the stock is a play on doubling natural gas penetration In India's primary energy mix. The company ticks a lot of boxes as it grows capacity and utilisation rates, it added.

JP Morgan, on the other hand, maintained an ‘overweight’ view and raised the target to Rs 350, implying a potential upside of over 13%.

(With PTI Inputs)