Petronet LNG Limited

Energy — Oil & Gas Refining & Marketing · NSE

₹293.00−₹2.20 (−0.75%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

No individual risk factor stands out on this snapshot.

In simple words: Strong business and financial position, but sales are shrinking. Whether sales start growing again is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

The 60-second version of Petronet LNG Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Petronet LNG Limited engages in the import, storage, regasification, and supply of liquefied natural gas (LNG) in India.

IndustryOil & Gas Refining & Marketing

SectorEnergy

Employees604

Annual revenue₹43,347 Cr

How does it make money?

Turns over ₹43,347 Cr a year. Of every ₹100 of sales, about ₹9 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 604 employees supports ₹71.77 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹71.77 Cr

Who are its competitors?

The closest listed comparisons in its industry are RELIANCE INDUSTRIES LTD, OIL AND NATURAL GAS CORP., BHARAT PETROLEUM CORP LT, INDIAN OIL CORP LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 21.2%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 17.6% against a peer median of 15.4% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE15.4%

What is the outlook?

26 analysts covering the stock expect revenue to grow about 37.4% and earnings to grow about 6.6% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+37.4%

Est. earnings growth+6.6%

Analysts26

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -26% while net margin moved +60% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-26%

Margin effect+60%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 9.7% a year
✗ Profit CAGR of only 5.6%
✗ Latest-year revenue growth of -53.2% is below the longer-term trend — momentum is fading

Quality vs. Valuation

Company Quality

63/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

58/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

10.4x

3Y Median

11.6x

40 monthly readings · mean 11.8x · range 9.0x–16.6x

Sector Median

6.9x

median of 4 sector peers

🟢Current valuation is approximately 10% below its 3y median of 11.6x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

⚠️Against its sector it trades 52% above the peer median of 6.9x.

vs. its own history

Fair

11.6x median over 40 months · -10%

vs. sector peers

Expensive

6.9x median of 4 peers · +52%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.1x

PEG

1.88

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 9.0% to 14.5% over 3 years.
Debt is being paid down
Total debt is down 30% over 3 years.
Cash generation is improving
Free cash flow is up 53% over 3 years.
High return on capital employed
ROCE of 21.2% is the mark of a business that converts capital into profit efficiently.
Very low debt
Debt/Equity of 0.11x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on equity is falling
ROE has dropped from 21.8% to 17.6% — each rupee of shareholder capital earns less than it did.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 21.2% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 9.0% to 14.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 30% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹2,231 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

A premium to the sector to defend
It trades 52% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 21.8% to 17.6%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 12%✓ 14.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹2,231 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 18%✓ 21.2%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Valuation vs its own median of 11.6x✓ 10.4x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

11 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

8 good · 2 neutral · 1 weak

Market Cap

₹43,950 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

10.4x

Cheap

Cheap against the generic band

P/B Ratio

1.97x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹28.06

Profitable

Profitable on a per-share basis

ROE

17.6%

Strong

Strong capital efficiency

ROCE

21.2%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.11x

Low

Conservative leverage

Revenue Growth (YoY)

-53.2%

Shrinking

Sales are contracting

Profit Growth (YoY)

35.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

3.41%

Healthy

Meaningful cash return while you hold the stock

Free Cash Flow

₹2,231 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

P/E (Forward)

10.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

24.0%

Good

Healthy core-business profitability

Net Margin

11.3%

Good

Strong bottom-line conversion

Current Ratio

5.67

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.48

Defensive

Steadier than the market

52W Range Position

63%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

289.5 / 287.9

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

57.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹58,927 Cr	₹51,928 Cr	₹50,680 Cr	₹43,347 Cr	-9.7%
EBITDA	₹5,291 Cr	₹6,078 Cr	₹6,432 Cr	₹6,270 Cr	+5.8%
EBITDA Margin	9.0%	11.7%	12.7%	14.5%	—
PAT (Net Profit)	₹3,326 Cr	₹3,652 Cr	₹3,973 Cr	₹3,913 Cr	+5.6%
EPS	₹22.17	₹24.35	₹26.48	₹26.08	+5.6%
ROE	21.8%	21.0%	20.0%	17.6%	—
ROCE	23.2%	23.5%	23.6%	21.2%	—
Total Debt	₹3,345 Cr	₹3,008 Cr	₹2,657 Cr	₹2,341 Cr	-11.2%
Free Cash Flow	₹1,460 Cr	₹4,030 Cr	₹2,941 Cr	₹2,231 Cr	+15.2%

🔴 Revenue has shrunk at 9.7% a year over 3 years.

🟢 EBITDA has grown at 5.8% a year over 3 years.

🟢 EBITDA Margin has risen from 9.0% to 14.5% over 3 years (+5.5 pts).

🟢 PAT (Net Profit) has grown at 5.6% a year over 3 years.

🟢 EPS has grown at 5.6% a year over 3 years.

🔴 ROE has fallen from 21.8% to 17.6% over 3 years (-4.2 pts).

🔴 ROCE has fallen from 23.2% to 21.2% over 3 years (-2.0 pts).

🟢 Total Debt has shrunk at 11.2% a year over 3 years.

🟢 Free Cash Flow has grown at 15.2% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹27,440 Cr

Total Liabilities

₹5,155 Cr

Cash & Equivalents

₹1,859 Cr

Operating Cash Flow

₹4,750 Cr

Capex

-₹2,519 Cr

Shareholding (proxy)

Institutional Holding

27.3%

Insider Holding

50.2%

Corporate Actions

Next Earnings

05 Nov 2026

Dividend Rate

₹10

Ex-Dividend Date

12 Jun 2026

Analyst Consensus

Recommendations

19 Buy · 7 Hold · 5 Sell

Target Price (Mean)

₹318.68

+8.8% vs CMP

Target Range

₹240 – ₹421

Peer Comparison

Company	P/E	ROE
RELIANCE INDUSTRIES LTD	21.9x	8.3%
OIL AND NATURAL GAS CORP.	6.4x	11.7%
BHARAT PETROLEUM CORP LT	7.3x	17.1%
INDIAN OIL CORP LTD	5.3x	15.4%

Recent News

1 positive1 mixed4 general

PETRONET Outlook for the Week

Equitypandit, 09 Oct

Petronet LNG Share Price: Buy Rs 345, Volume Recovery

Univest, 14 Aug

Petronet LNG Share Price: Motilal Oswal, UBS, Nomura see up to 25% upside - What are key triggers?

Zee Business, 28 Sept

Petronet LNG: A Public Company Built to Escape Public Accountability

Frontline Magazine, 08 Apr

Petronet to pay 1% of profit as commission to its directors for 5 years

Business Standard, 27 SeptCapacity

🟡Mixed / dependsCapacity additions can raise revenue over two to three years, but the capital spend usually pressures free cash flow first. Worth checking whether the capex is funded from operations or from borrowing.

Petronet LNG Limited (NSE:PETRONET) Is About To Go Ex-Dividend, And It Pays A 3.7% Yield

Simply Wall Street, 08 JunCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Watch Items

Revenue growth is negative (-53.2%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Valuation · Risk

MiddlingProfitability

WeakGrowth

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you.

All 5 tripwires holding · see Key things to watch ↑