Results: Petronet LNG Limited Exceeded Expectations And The Consensus Has Updated Its Estimates

Petronet LNG Limited (NSE:PETRONET) shareholders are probably feeling a little disappointed, since its shares fell 2.2% to ₹305 in the week after its latest annual results. The result was positive overall - although revenues of ₹533b were in line with what the analysts predicted, Petronet LNG surprised by delivering a statutory profit of ₹24.35 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Petronet LNG

After the latest results, the 29 analysts covering Petronet LNG are now predicting revenues of ₹551.2b in 2025. If met, this would reflect a reasonable 3.3% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be ₹24.36, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of ₹588.6b and earnings per share (EPS) of ₹23.62 in 2025. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

There's been a 9.9% lift in the price target to ₹277, with the analysts signalling that the higher earnings forecasts are more relevant to the business than the weaker revenue estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Petronet LNG at ₹354 per share, while the most bearish prices it at ₹212. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Petronet LNG shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Petronet LNG's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.3% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Petronet LNG is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Petronet LNG following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. With that said, earnings are more important to the long-term value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Petronet LNG analysts - going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Petronet LNG that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.