Shares of Petronet LNG rose 5 percent in early trade on Tuesday after the company reported better than expected earnings for the first quarter of fiscal 2021. Petronet LNG’s net profit in Q1FY21 rose 33.9 percent to Rs 499.8 crore from Rs 373.2 crore in the previous quarter. CNBC-TV18 analysts’ poll had estimated profit of Rs 441 crore.

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Revenue fell 43 percent to Rs 4,883.6 crore from Rs 8,567.2 crore, QoQ. Total volumes during the quarter stood at 190 tbtu.

Operating performance improved sequentially as EBITDA rose 30.5 percent to Rs 909.9 crore from Rs 697.5 crore while EBITDA margin expanded by 1050 bps to 18.6 percent from 8.1 percent, QoQ.

Morgan Stanley maintained an Overweight call on the stock with a target of Rs 321 per share. The brokerage is of the view that Petronet LNG’s earnings beat was on better-than-expected volumes while the COVID impact on LNG imports was lower than estimated.

Demand has recovered to pre-COVID levels, implying the start of an upgrade cycle, Morgan Stanley said. Oversupplied LNG markets and low prices remain tailwinds, it added.

The stock as much as 5.20 percent to Rs 267.70 apiece on the BSE. At 9:50 am, the shares were trading 2.48 percent higher at Rs 260.75.

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