Contribution of natural gas to world’s energy mix is growing rapidly and India wants to expand its gas consumption also. In addition LNG capacity addition globally is also expanding while LNG trades are becoming increasingly liquid. Given that we don’t have vast gas resources to go with, our reliance on LNG will only increase, and Petronet is going to be a key player in India’s push for cleaner Energy.
What I see in Petronet is a virtual monopoly, high ROE, profitable and cash rich business available at an enterprise value x 9 times EBITDA and market cap almost at sales value. It’s very hard to find such businesses in a sunrise sector at such cheap valuations.
In my view, stock is way undervalued and at forward earning basis, still trading below it’s historical averages while rest of the PSU pack has seen major rerating. There is a lot of juice left in this counter.
| Subscribe To Our Free Newsletter |
