Geojit Investments Limited has upgraded its rating on Petronet LNG Ltd to ACCUMULATE, setting a target price of Rs 305 from the current market price of Rs 269, signaling a 13% upside potential amid strategic expansions and rising LNG demand in India. The brokerage highlights Q2FY26 challenges like a 15.5% revenue drop to Rs 11,009 crore due to lower volumes at Dahej terminal and delays in capacity upgrades, yet notes margin resilience with EBITDA at 10.1%. Key growth drivers include Dahej's 5 MMTPA expansion by March 2026, Kochi terminal's record 27% utilization, and upcoming petchem and Gopalpur projects, positioning Petronet for FY27 earnings recovery to Rs 29.6 per share. This report dissects the financials, outlook, and investment levels for discerning traders.

Geojit Signals Accumulate on Petronet LNG

Geojit Investments, a seasoned Kochi-based research house, has pivoted its stance on Petronet LNG Ltd, upgrading from prior HOLD calls to ACCUMULATE with a robust target of Rs 305. This reassessment, dated December 16, 2025, hinges on anticipated LNG demand surge across Indian industries and capex momentum. At Rs 269 current market price (CMP), the stock trades at 10.2x FY26E PE, undervalued against peers amid expansion tailwinds.

The upgrade reflects management's optimism on Dahej terminal's commissioning by March 2026, despite monsoon-induced delays shifting from prior October timelines. Petronet's mid-cap stature in the consumable fuels sector, with a Rs 40,425 crore market cap, underscores its pivotal role in India's LNG infrastructure.

Q2FY26 Earnings: Resilience Amid Headwinds

Petronet LNG posted a 15.5% year-on-year revenue contraction to Rs 11,009 crore in Q2FY26, primarily from Dahej terminal's volume dip to 211 TBTUs from 225 TBTUs. Kochi terminal shone brighter, with capacity utilization leaping 500 basis points to 27%, the highest ever.

EBITDA slid 7.1% to Rs 1,117 crore, but margins dilated 90 basis points to 10.1% on a 17.4% plunge in material costs. Profit after tax edged down 4.6% to Rs 830 crore (EPS Rs 5.5), with H1FY26 trends mirroring softness at -13.4% sales growth YoY.

Strategic Expansions Fueling Growth Trajectory

Dahej's expansion to add 5 million metric tons per annum (MMTPA) by March 2026 has already consumed Rs 450 crore capex, part of FY26's Rs 5,000 crore outlay skewed toward H2. Kochi-Bengaluru pipeline completion by FY26 end promises utilization ramp-up.

Gopalpur terminal advances with land acquisition finalized and environmental clearance resubmitted for a land-based setup. Petchem project accelerates in H2FY26, cumulative capex exceeding Rs 600 crore, while Qatar LNG contract renewal ensures seamless supply post-April 2028.

Financial Projections: Modest FY26, Robust FY27

Geojit trims FY26E revenue to Rs 48,943 crore (-4% YoY) and PAT to Rs 3,980 crore (0.2% growth), reflecting volume pressures. FY27E rebounds sharply: sales to Rs 55,305 crore (+13%), EBITDA margins to 12.1%, and adjusted EPS to Rs 29.6.

Balance sheet fortifies with net cash at Rs 10,152 crore by FY26E, debt-equity at 0.1x, and ROE steady at 17.8%. Dividend yield allure persists at 3.7%, with DPS eyed at Rs 11.9 in FY27.

Shareholding and Market Metrics

Promoters anchor at a steady 50%, with FIIs at 28% and MFs/institutions at 11.7% as of Q2FY26—no pledges mar the structure. Beta of 0.8 signals low volatility, 52-week range Rs 266-349.

Price underperforms Sensex by 24.9% over one year, trading at 5.6x FY26E EV/EBITDA—enticing for accumulators eyeing 13% returns to Rs 305.

Investment Levels and Trader Roadmap

For bullish investors, buy on dips below Rs 260, with immediate support at Rs 266 (52-week low) and resistance at Rs 305 target. Momentum traders eye Rs 290 breakout for FY27 upside.

Accumulate zone: Rs 260-275 offers 10-17% buffer to target. Stop-loss at Rs 255 guards against prolonged delays. Long-term holders anticipate petchem synergies propelling EV/EBITDA to 4.7x FY27E, yielding 17.8% ROE. Geojit's calculus, at 10.3x FY27E EPS, posits Petronet as a stealth play on India's gas renaissance—poised for re-rating as volumes materialize.