We expect near-term growth to pick up with the Kochi Mangalore pipeline now commissioned which will open up new customers. Interestingly, the price of newly discovered domestic gas is linked to the global LNG price. With global LNG prices falling (and likely to remain weak), crude prices continuing to rise and economy recovering rapidly, we expect LNG offtake to increase in India during FY22. We estimate this will drive 8% and 17% earnings growth for PLNG in FY22 and FY23.
PLNG is trading at FY22e PE of ~11x, a 20% discount to its 10-year historical average. Catalyst: Increased utilisation of Kochi terminal should drive up both earnings and the PE multiple. Key risks are sharp increase in domestic gas production, sharp cut in Kochi tariffs and ROE-dilutive capex.
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