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

Investors in Petronet LNG Limited (NSE:PETRONET) had a good week, as its shares rose 8.6% to close at ₹372 following the release of its quarterly results. The results were mixed; although revenues of ₹134b fell 15% short of analyst estimates, statutory earnings per share (EPS) of ₹7.37 beat expectations by 20%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Petronet LNG after the latest results.

Check out our latest analysis for Petronet LNG

Taking into account the latest results, Petronet LNG's 29 analysts currently expect revenues in 2025 to be ₹553.4b, approximately in line with the last 12 months. Statutory earnings per share are expected to reduce 2.7% to ₹25.56 in the same period. In the lead-up to this report, the analysts had been modelling revenues of ₹560.0b and earnings per share (EPS) of ₹24.46 in 2025. So the consensus seems to have become somewhat more optimistic on Petronet LNG's earnings potential following these results.

The consensus price target rose 7.3% to ₹307, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Petronet LNG analyst has a price target of ₹412 per share, while the most pessimistic values it at ₹235. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Petronet LNG's revenue growth is expected to slow, with the forecast 2.1% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Petronet LNG.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Petronet LNG's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Petronet LNG analysts - going out to 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Petronet LNG that you need to be mindful of.

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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.

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