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The market expects Petronet LNG to do better than it ever has.
At today’s share price, buyers are assuming Petronet LNG grows about 17% a year, forever. Over the last ten years it actually grew about 0% a year. So the share price only makes sense if the business improves on its own track record. If it simply carries on as before, buyers today have paid for something they will not get.
- How it is valued: Discounted cash flow.
- What the price assumes: 17% growth, against 0% the model takes from its own record.
- Ten-year record: Between FY2019 and FY2026, Petronet LNG's revenue went from ₹38,395 crore to ₹43,495 crore — it barely moved over 7 years.
- Biggest swing factor: Terminal utilisation. Main risk: New terminals.
01Turning imported LNG into gas
Petronet LNG was promoted by GAIL, ONGC, Indian Oil and BPCL, which each hold a stake. It runs the Dahej terminal in Gujarat — India's largest — and a terminal at Kochi.
It earns regasification charges for converting imported liquefied natural gas back into gas, and is building a petrochemicals complex at Dahej.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the growth that price implies for Petronet LNG, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03Petronet LNG's record, in plain numbers
Between FY2019 and FY2026, Petronet LNG's revenue went from ₹38,395 crore to ₹43,495 crore — it barely moved over 7 years. Net profit grew from ₹2,231 crore to ₹3,913 crore, about 8% a year — faster than revenue, so margins widened. In FY2026 it kept 9.0% of revenue as net profit — against a low of 5.8% in FY2023 and a high of 11.3% in FY2021. Revenue slipped 14.7% in the latest year, well behind its own long-run pace.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2019 | 38,395 | 2,231 | 5.8% |
| FY2020 | 35,452 | 2,703 | 7.6% |
| FY2021 | 26,023 | 2,939 | 11.3% |
| FY2022 | 43,169 | 3,438 | 8.0% |
| FY2023 | 59,899 | 3,464 | 5.8% |
| FY2024 | 52,729 | 3,652 | 6.9% |
| FY2025 | 50,982 | 3,973 | 7.8% |
| FY2026 | 43,495 | 3,913 | 9.0% |
04How Petronet LNG gets valued — and why
Discounted cash flowThis business is valued on the cash it is expected to generate, discounted back at its cost of capital — with growth taken from its own ten-year record rather than from guidance.
05What decides Petronet LNG's value
Terminal utilisation
Volumes through Dahej and Kochi.
Regasification tariffs
Fee rates drive profit.
Petrochemicals project
A new business with different risks.
Gas demand
India's gas use for power, fertiliser and city gas.
06What could go wrong
- New terminals. Competing terminals could take volumes.
- Project risk. The petrochemical complex is a large investment.
- Kochi utilisation. The Kochi terminal has run below capacity.
07What the full Petronet LNG valuation shows
Sign in free to see the complete Petronet LNG valuation
- ✓Fair value per share — from a ten-year discounted cash flow, every step shown
- ✓The Workbench — change revenue growth, the discount rate or terminal growth and watch Petronet's value move
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against GAIL, Indian Oil and ONGC
- ✓Downloadable report — the full write-up, yours to keep
08Questions people ask about Petronet LNG
Who owns Petronet LNG?
GAIL, ONGC, Indian Oil and BPCL each hold a stake.
How does Petronet make money?
By charging a fee to regasify imported LNG.
Why is Petronet's profit steady?
LNG prices are passed through; it earns a fee per tonne.
Is Petronet LNG overvalued?
At ₹324 the market is pricing in roughly 17% sustained growth, against the ~0% its own record supports. That is more than it has delivered, so the price is justified only if the business can hold a rate it has not previously sustained.
What is the intrinsic value of Petronet LNG?
It is computed from the filed financial statements using the method that fits this business (discounted cash flow), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How much debt does Petronet LNG carry?
Debt to equity stands at 0.00, against 0.00 at the start of the period — the balance sheet is a core input to the cost of capital used here.