Petronet LNG: Motilal Oswal Sees 50% Upside as Stock Hits 52-Week Low

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Petronet LNG, India’s leading liquefied natural gas importer, has landed back on investor radars after brokerage firm Motilal Oswal projected a sharp upside for the stock. Despite touching a 52-week low of ₹268.85 on August 26, 2025, the firm has set a target price of ₹410, suggesting a potential gain of over 50 percent. The bullish outlook is driven by Petronet’s expansion plans, strong fundamentals, and favorable demand trends in India’s energy sector.

Key highlights from Motilal Oswal’s analysis

- Petronet is expected to secure long-term LNG contracts within the next 12 to 18 months, which could stabilize volumes and earnings.
- The company is expanding its Dahej terminal by 5 million metric tonnes per annum (MMTPA), with commissioning expected by December 2025.
- Despite emerging competition from HPCL’s Chhara terminal and Dabhol’s expansion, Petronet is likely to retain its leadership in India’s LNG import market.
- The stock is currently trading at 8.9 times its projected FY27 earnings and offers a dividend yield of 4.3 percent.
- India’s LNG consumption now accounts for nearly 50 percent of total gas usage, up from 35 percent a decade ago, signaling strong long-term demand.

Sector dynamics and strategic outlook

Petronet’s market share has declined from 78 percent in FY15 to 69 percent due to limited capacity additions over the past decade. However, the upcoming Dahej expansion could reverse this trend and help the company regain momentum. The Petroleum and Natural Gas Regulatory Board (PNGRB) expects India’s LNG imports to more than double by 2030, driven by rising demand and limited domestic gas production. Petronet’s infrastructure and strategic positioning make it a key player in this evolving landscape.

Valuation and analyst sentiment

Motilal Oswal’s valuation model assumes a 10 percent tariff cut in FY28, followed by a 4 percent annual increase for both Dahej and Kochi terminals. The brokerage believes the stock is undervalued and presents a strong buying opportunity. Among 34 analysts covering Petronet LNG, 13 recommend buying, 11 suggest holding, and 10 advise selling, reflecting a mixed but cautiously optimistic sentiment.

Stock performance and investor insights

Petronet LNG’s share price has dropped 11 percent over the past month and is down 23 percent year-to-date. Despite this decline, Motilal Oswal remains confident in the company’s long-term prospects, citing its infrastructure, expansion plans, and favorable demand dynamics. For investors seeking value in the energy sector, Petronet LNG offers a compelling case for recovery and growth.

Conclusion

Petronet LNG’s current valuation, coupled with its strategic expansion and Motilal Oswal’s bullish forecast, positions it as a strong contender for long-term investment. While short-term volatility may persist, the company’s fundamentals and sector outlook suggest a promising trajectory. As India’s energy needs evolve, Petronet LNG could play a pivotal role in meeting the country’s growing demand for cleaner fuel.

Sources: CNBC TV18, Moneycontrol Hindi, Wealthy Brains