Petronet LNG Ltd - A Safe Buy

CMP: 172

Petronet LNG Ltd. was formed by the Government of India to import liquefied natural gas (LNG) into the country. The Company is a joint venture between GAIL, ONGC, IOC and BPCL. Petronet LNG has also selected GAZ de France as a strategic partner. The Company has set up LNG receiving ports in Dahej (Gujarat) and Kochi (Kerala).

Petronet LNG is a safe bet for short term and long term. Recent Quarters have been very impressive both in bottom-line and revenue growth. Q1 FY11 profits is at 256 Crores compared to 111 Crores in Q1 FY10 (Revenues have grown in similar lines). Its currently trading at a P/E of less than 17 which is way more than fair for its growth prospects. Good dividend yields of 1.16% in the last 12 months. Decent NPM at 5.5%. Buy and accumulate on dips.