Shares of Petronet LNG have been on a roll in the recent past even though the broader market has been highly volatile.
The stock hit a 52-week high of ₹239.80 on BSE in the previous session, on March 16, 2023. It hit a 52-week low of ₹191.30 on March 28, 2022.
Can the stock rise further? Should one buy or book some profit in the stock at this point? MintGenie talked to analysts to understand the fundamental and technical aspects of the stock. Here's what they said:
Fundamental views
Abhijeet Bora, Associate VP - Research, Sharekhan by BNP Paribas
Petronet LNG’s earnings model is resilient to volatility in LNG price given the contracted LNG volume for the Dahej terminal.
Moreover, the recent sharp fall in the spot LNG price to $14/mmbtu (from nearly $30/mmbtu in Q3FY23) would improve volume/utilisation at its Dahej LNG terminal. This coupled with an annual 5 percent tariff hike for Dahej/Kochi terminal would drive earnings recovery for Petronet LNG.
"The stock trades at an attractive valuation of 9.9 times and 8.5 times FY24E and FY25E earnings per share (EPS), respectively, given earnings visibility, high RoE (return on equity) of 22 percent and a healthy dividend yield of 5 percent. We have a buy rating on Petronet LNG," said Bora.
Technical views
Aamar Deo Singh, Head Advisory, Angel One
Technically, the stock is strong on different timeframes, clearly indicating the strong investor interest in the stock.
"The stock has immediate resistance around the ₹240-245 mark, if that is taken out, it has the potential to rally towards the ₹260-270 mark. On the downside, the stock has very strong support around the ₹215-220 zone. Most of the technical indicators are positive, hence any dip in prices can be used as a buying opportunity," said Singh.
Naveen Mishra, Senior Research Analyst - Equity Research, CapitalVia Global Research
Technically, the stock has given the breakout of a strong resistance level of ₹232 and sustaining above it.
On the weekly chart, it has given a strong trendline breakout and RSI is sustaining above 60, which is a positive indication.
"For medium-term holding, ₹232-235 range can be a good entry-level, where the nearest support level of ₹210 can act as a good stop loss. On the higher side, we can expect levels of ₹249 and ₹260 in the near term," said Mishra.
Jigar S. Patel, Senior Manager - Equity Research, Anand Rathi Share and Stock Brokers
After a long consolidation period (March 2022 -March 2023), the stock gave a clean breakout in its previous trading range high of ₹230.
"From the indicator point of view, the weekly RSI has taken out its previous swing high of 60 which confirms a bullish stance in the counter. Moreover, the weekly scale alligator is supporting price action which further complements our bullish view on the counter," said Patel.
"One can buy in small tranches between ₹234-238 and another around ₹228-230 (if tested). The target price would be ₹265 with a stop loss of ₹218," Patel said.
Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher
The stock has appreciated decently in the past two-three weeks, moving past the previous peak zone of ₹232, indicating a breakout with good volume participation.
"One can anticipate a further rise in the coming days. The near-term support can be maintained near ₹232 with further initial targets expected near ₹250-255 levels and thereafter if strength is sustained, it can also hit ₹267-270 zone," said Parekh.
"The RSI is well placed with further upside potential indicated, one can hold the position keeping ₹232 as the stop loss. The trend shall weaken only after a decisive slide below ₹222," Parekh said.
According to a MintGenie poll, 32 analysts on an average have a ‘buy’ call on the stock.
Disclaimer: The views and recommendations given in this article are those of individual analysts and broking firms. These do not represent the views of MintGenie.
