Brokerage Motilal Oswal has started coverage on Petronet LNG with a price target of Rs 362, citing attractive valuations and steady dividends. The company recently reported a 35% jump in Q1 FY27 profit to Rs 1,137 crore, though supply chain disruptions in the Persian Gulf remain a key challenge impacting total volumes.
On August 14, 2026, brokerage firm Motilal Oswal initiated coverage on Petronet LNG with a 'Buy' rating and a price target of Rs 362. This update follows the company’s Q1 FY27 financial results reported on August 12, 2026, which highlighted strong profitability despite difficulties in moving gas through international shipping routes.
Petronet LNG reported a consolidated net profit of Rs 1,137 crore for the quarter ended June 2026, marking a 35% increase compared to the same period last year. While profit grew significantly, revenue for the quarter stood at Rs 5,557.84 crore, showing a decline on a year-on-year basis. The company’s EBITDA margin, which measures core operating profitability before interest, taxes, and other expenses, improved to 27.6% during the quarter. This margin improvement was primarily driven by gains from trading and inventory management, which helped offset lower-than-expected volumes.
Motilal Oswal’s report pointed to these trading and inventory gains as key factors for the strong profit figures. The brokerage noted that the company’s valuation, trading at roughly 11.6 times its estimated earnings for FY27, appears inexpensive. Additionally, the company offers a dividend yield of approximately 3.4%, which adds to its appeal for income-focused market participants.
However, the company faces notable operational hurdles. Total volumes for the quarter were 207 tbtu, which fell roughly 7% short of expectations. This volume deficit is largely tied to supply chain disruptions in the Persian Gulf region, which have impacted the flow of Liquefied Natural Gas (LNG) imports. Investors should keep in mind that the company is highly sensitive to geopolitical events in this region, as any instability can disrupt the steady supply of gas required to run its terminals at optimal capacity.
Beyond supply chain issues, the business outlook is also influenced by regulatory and operational factors. The market is closely watching how future tariff revisions, particularly for the Dahej terminal, might impact profitability in the coming years. Changes in global gas pricing and the rupee-dollar exchange rate also play a significant role in the company's financial performance. As the company navigates these challenges, its ability to secure new supply contracts with major global players will remain a central point of focus for the market. Investors may track further management commentary regarding these supply efforts during the 22nd Annual Global Investor Conference scheduled for August 17, 2026.