KUALA LUMPUR (April 2): PETRONAS Dagangan Bhd (KL:PETDAG) is expected to face a challenging demand outlook following the government’s recent implementation of retail price adjustment and the introduction of work-from-home (WFH) policies, said MBSB Research.
“Based on these developments, fuel demand is expected to be adversely impacted, primarily driven by the phased implementation of work-from-home (WFH) arrangements and the increase in diesel prices,” said MBSB Research in a note on Thursday as it downgraded its call for PetDag from 'buy' to 'neutral'.
These factors are likely to moderate commuting-related consumption and weigh on near-term retail volumes.
The research house cut its earnings forecast for PetDag for the financial year ending Dec 31, 2026 (FY2026) to reflect a more cautious demand outlook.
It now expects a revenue of RM39.76 billion and an operating profit of RM1.76 billion for FY2026. The profit before tax is estimated at RM1.74 billion, with a core Patami (profit after tax and minority interest) of RM1.18 billion.
In line with this, it revised its target price on the stock to RM22.20 from RM23.64 earlier.
Consequently, to cushion the impact of rising costs, the government has enhanced the Budi Diesel programme, providing an additional RM100 in cash assistance for April 2026, bringing the monthly total to RM300 for eligible recipients.
To further reduce domestic fuel consumption, a phased WFH arrangement will be rolled out effective April 15, 2026. This policy will apply to federal ministries, government agencies, statutory bodies, and government-linked companies (GLCs), while private sector employers are encouraged to follow suit.
Critical sectors, including healthcare, enforcement agencies (police and military) and the education sector, will be excluded from the WFH policy to ensure operational continuity.
Despite the downgrade, PetDag is projected to maintain a steady dividend yield.
MBSB Research estimates a dividend per share (DPS) of 118.6 sen for FY2026, representing an expected dividend yield of 5.3%.
PetDag shares last traded at RM22.00, giving the company a market capitalisation of approximately RM20.84 billion.