PETRONET - Petronet LNG

📊 NSE: PETRONET 🏢 Miscellaneous 📅 Last Updated: 12/14/2025 10:58

💰 Financial Performance

Revenue Growth by Segment

The primary segment, RLNG regasification, saw H1 FY25 net sales of INR 26,437 Cr, a 9.3% increase from INR 24,188 Cr in H1 FY24. FY24 total revenue was INR 52,728.4 Cr, a 15.4% decline from FY23's INR 59,899.4 Cr, primarily due to lower global gas prices.

Geographic Revenue Split

100% of revenue is generated within India, primarily through its flagship terminals at Dahej (Gujarat) and Kochi (Kerala).

Profitability Margins

PAT margin stood at 7% in FY24 and remained stable at 7% for 9M FY25. Profit After Tax for H1 FY25 was INR 1,989 Cr, representing a 23.7% growth compared to INR 1,608 Cr in H1 FY24.

EBITDA Margin

OPBDIT margin was 10.4% for 9M FY25, up from 10.0% in FY24. The company has maintained an annual EBITDA of more than INR 5,000 Cr for the past three years due to stable regasification volumes and 'Use or Pay' charge bookings.

Capital Expenditure

Planned capex includes INR 20,685 Cr for an integrated petrochemical complex and INR 1,900 Cr for a 3rd jetty at Dahej. FY26 capex guidance is INR 5,000 Cr, of which INR 525 Cr was spent in H1 FY26.

Credit Rating & Borrowing

CRISIL reaffirmed 'CRISIL AAA/Stable' and ICRA reaffirmed '[ICRA]AAA (Stable)'. Interest coverage is robust at 20.34 times for 9M FY2025, reflecting superior financial flexibility and very low external debt (primarily lease liabilities).

⚙️ Operational Drivers

Raw Materials

Liquefied Natural Gas (LNG) is the primary raw material, accounting for the vast majority of operational costs. Ethane and Propane will become key inputs for the upcoming petchem project.

Import Sources

LNG is primarily imported from Qatar and the USA (via Exxon Mobil).

Key Suppliers

Key suppliers include QatarEnergy (formerly RasLaffan) under long-term SPAs and Exxon Mobil.

Capacity Expansion

Dahej terminal is expanding from 17.5 MMTPA to 22.5 MMTPA by May 2025. The Petchem project will add 750 KTPA of Propane Dehydrogenation (PDH) and 500 KTPA of Polypropylene (PP) capacity by October 2028.

Raw Material Costs

Raw material costs are highly sensitive to global LNG spot prices; high prices in FY23 caused Dahej utilization to drop to 77%, while moderation in FY25 prices boosted utilization to 105%.

Manufacturing Efficiency

Dahej terminal utilization reached ~105% in H1 FY25. Kochi terminal utilization is low at ~20% but is expected to ramp up to 30-35% following the commissioning of the Kochi-Bengaluru pipeline.

Logistics & Distribution

Distribution is managed via the national gas grid; the completion of the DBPL pipeline (1000 km) is critical for increasing Kochi terminal's reach.

📈 Strategic Growth

Expected Growth Rate

7-11%

Growth Strategy

Growth will be achieved by expanding Dahej capacity by 5 MMTPA (28% increase), diversifying into the petrochemicals market with a 500 KTPA Polypropylene unit to capture 10% of India's incremental demand, and increasing Kochi utilization through new pipeline connectivity.

Products & Services

Regasified Liquefied Natural Gas (RLNG), bunkering, storage and reload services, and future production of Polypropylene.

Brand Portfolio

Petronet LNG

New Products/Services

Polypropylene (PP) production from the new petchem complex is expected to contribute significantly to revenue post-2028.

Market Expansion

Exploring a new LNG terminal at Gopalpur and expanding reach in the City Gas Distribution (CGD) sector, which is identified as the primary growth leader.

Market Share & Ranking

Petronet is the market leader, controlling nearly 50% of India's domestic RLNG regasification capacity.

Strategic Alliances

Joint venture of GAIL, ONGC, IOCL, and BPCL (12.5% equity each), providing strong parentage and off-take security.

🌍 External Factors

Industry Trends

The industry is shifting toward gas-based economies; Petronet is positioning itself by securing long-term supplies through 2048 and diversifying into petrochemicals to mitigate energy transition risks.

Competitive Landscape

Faces competition from new greenfield terminals, but maintains an edge due to lower capital costs and established 'Take or Pay' contracts.

Competitive Moat

Moat is sustained by cost leadership (lowest regasification charges) and dominant infrastructure (50% market share), which are difficult for competitors to replicate due to high capital intensity.

Macro Economic Sensitivity

Highly sensitive to India's GDP growth and the government's target to increase natural gas in the energy mix to 15% by 2030.

Consumer Behavior

Increasing demand for cleaner fuels in transport (LNG trucks) and City Gas Distribution is driving volume growth.

Geopolitical Risks

Supply risks from the Middle East (Qatar) and global LNG price volatility caused by events like the Russian invasion of Ukraine.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by PNGRB and MoP&NG; regasification tariffs and pipeline access are key regulated areas.

Environmental Compliance

ESG profile is strong; the company is not environment-footprint heavy but focuses on mitigating oil and gas industry impacts to maintain its 'AAA' credit profile.

Taxation Policy Impact

Effective tax rate is reflected in the 7% PAT margin; fiscal policies promoting natural gas usage (e.g., GST inclusion) remain key monitorables.

Legal Contingencies

The company has 'Use or Pay' dues of INR 1,715 Cr as of September 30, 2024. While secured by bank guarantees, a time-based provision of INR 599 Cr has been created against these dues.