Petronet LNG Ltd’s robust performance in the September quarter (Q2) triggered widespread earnings upgrades. At least five brokerage firms have raised their earnings estimates for the company for the current and next fiscal years.

The upgrades are driven by capacity additions at Petronet LNG’s Dahej terminal. The company is expanding Dahej LNG terminal capacity by 50%. As part of the process, additional regasification facility was added in August and storage tanks in October.

As new facilities came on- stream, volumes rose 12% from the June quarter. This pushed up net profit by 22% on a sequential basis, which was significantly higher than Street estimates.

That said, the September quarter is yet to fully reflect the benefits of new capacities. According to analysts, the management expects the new capacities to reach full utilization by the end of the current fiscal year. So, the second half of the fiscal year can also see good volume growth. “The management has guided that H2 FY17 volume should be better than H1 FY17 with the new contracts," IDBI Capital Markets and Securities Ltd said in a note.

That’s not all. The company is planning to expand the Dahej facility further by 2019. The new facilities, moderate fuel rates and adequate offtake agreements at Dahej are improving the earnings outlook, leading to earnings upgrades.

While the upgrades should provide good support to the stock—which is up 78% in the last one year—the next big trigger will be resolution of issues at its Kochi terminal. The Kochi terminal is seeing meagre utilization levels (7% last quarter compared to Dahej’s 125%) due to pipeline connectivity issues. The problems have lingered for some time.

The company hopes expansion of Bharat Petroleum Corp. Ltd’s refinery will aid volumes, Religare Capital Markets Ltd said in a note. Further, according to analysts, GAIL (India) Ltd is in the process of inviting tenders for construction of the remaining stretches of the Kochi-Mangalore-Bangalore pipeline. According to ICICI Securities Ltd, Petronet LNG could add 1-1.5 million tonnes per annum of gas from 2018-19 onwards, if the pipeline work is completed.

While there is no time-bound resolution plan yet, any indications the company is on track to improve utilization and volumes at Kochi terminal can bring relief for investors. “Progress on Kochi-Mangalore pipeline is also a trigger for the stock," Elara Securities (India) Pvt Ltd said in a note.

Improvement in Kochi terminal volumes will further strengthen Petronet LNG’s return ratios.