Deep Dive: Dorian LPG Ltd (Ticker symbol: LPG)
(published on Substack on 28 Apr 2026)
Dear fellow value investors,
Please see below the deep dive research related to the company in the LPG transportation business. It is worth noting that the Q1 results for the covered stocks will soon be published. Furthermore, the quarterly results of shipping companies in the relevant segment (tankers, dry bulk, etc.) will be posted in due time. We are eagerly awaiting new information and guidance from the relevant shipping companies’ management.
Meanwhile, enjoy the analysis.
Business overview
Dorian LPG Ltd. was founded in 2013 and became a publicly listed company in 2014. It is listed on the NYSE under the ticker symbol: LPG.
The company’s current market capitalisation is USD 1.623 billion, and the P/E ratio is 13.41:
Source: Yahoo Finance
Dorian LPG Ltd. is engaged in LPG transportation and owns and operates 27 VLGC (Very Large Gas Carriers) with a usual capacity of 82,000-92,000 cbm (cubic meters), including 6 chartered-in VLGCs (2):
Source: Dorian LPG Ltd., Q3 2026 Earnings Call
It is worth noting that in 2015, the company established with MOL Energia a JV called Helios Pool (50%/50% partnership), with the current fleet of 27 VLGCs (Dorian LPG Ltd) and 2 VLGCs (MOL Energia).
The current average age of the company’s fleet is 11 years. The global average fleet age sits at 12.1 years (1). The pool is chartering out VLGCs on a spot market, COAs or time charters for two years or less. So, the business model of the company with the pool is to create a steady cash flow from time chartering and take advantage of the benefits of the spot market. On the 26th of March 2026, the company received the delivery of its new VLGC (the “Aerion” (6)), which will also be able to carry ammonia (2).
The company operates globally and employs its vessels on long-haul voyages (3):
Source: Baltic Exchange
The VLGC vessels have only three major routes:
1. Middle East – Asia
2. USG – Europe
3. USG – Asia (via the Panama Canal)
So, the company’s business model is very simple, and its main source of income stems from the pool partnership.
Financials
It is worth noting that the company reports its financial performance from Apr 1 to Mar 31 of the following year. So, the company will report its financial performance for 2026 starting from Apr 1, 2025, to Mar 31, 2026. We are awaiting 4Q2026 (Jan-Mar 2026) financial results.
Please see below the summary of the financial performance, and FY 2026 is only till 31 Dec 2025 (3Q FY2026):
Source: Internal analysis based on LPG annual reports
The company has been profitable for the past few years and has been disciplined in its capital allocations. The revenue, net income (hence EPS) and FCF fluctuated due to the swings of the daily earnings/TCE but remained positive.
The company has finished the drydocking procedures of its 12 VLGCs, and the last one is scheduled for Q1 2026, which shall reduce the capital expenditures.
The company has not made any meaningful share buybacks since 2021:
Source: Internal analysis based on LPG annual reports
Instead, Dorian LPG Ltd. has been rewarding its shareholders via dividend payouts. According to the company, since 2014, it has returned to its shareholders USD 960 million via dividends and share repurchases.
The net debt has been aggressively reduced since 2023:
Source: Internal analysis based on LPG annual reports
The last column is related to the 9 months of FY 2026, and it is already visible that the company has reduced net debt by around USD 17 million versus 2025.
The cash and cash equivalents as of 31 December 2025 (3Q 2026) stand at USD 294 million:
It is important to note that the company has to pay USD 62 million for the delivery of the new VLGC, the aforementioned “Aerion” (ammonia capable) vessel by the end of Mar 2026, with a capacity of 93,000 cubic meters (6), and during the 3Q 2026 earnings call, the company was asked how they will finance it:
Source: Dorian LPG Ltd., Q3 2026 Earnings Call
So, from the above, we can conclude that once the delivery of the vessel takes place, the available cash of USD 294 million shall drop by USD 62 million, and the net debt should go up. However, having the current net debt at USD 219 million should not be a concern, as the LTV (Loan-to-Value) stands at 13% (USD 219 million of net debt / USD 1.623 billion of market capitalisation as of 28 Apr 2026), which, as per the industry standards, is a very healthy percentage, as the higher the percentage of the LTV, the more leveraged the company.
If we look at stockholders’ equity, we get USD 1.1 billion:
Source: Dorian LPG Ltd., Q3 2026 Earnings Call
Now, by looking at all financial metrics, we can conclude that the company is not leveraged, has solid cash and low net debt, and allocates its capital conservatively and seems to be in a very good financial state.
What to expect in 2026?
As it was mentioned in one of the previous posts related to the LPG commodity, it is slated to expand. Let’s analyse fundamental factors such as supply of and demand for LPG and the current fleet of VLGC and its implications.
Supply of LPG
The US became the leader in LPG production and export. According to Dorian LPG Ltd (1), the global seaborne LPG volumes in 2025 reached 145.4 million tons versus 140.5 million tons in 2024, which shows a growth of 3 per cent. The US has been a leader since 2023, and is slated to add more export capacities in the upcoming years:
Source: FGE
Source: Internal analysis
If we look at the chart above, we can see that the annual export volume from the US should reach 99.40 million tons in 2026, 103.30 million tons in 2027 and 115.10 million tons in 2028.
According to Dorian LPG Ltd., the US and Middle East exports in 2025 grew by 4 per cent and 2 per cent, respectively, compared to 2024 volumes (1):
Source: Dorian LPG Ltd., Investor Presentation, February 5, 2026
And this expanding export trend is slated to continue going forward. But considering the current situation in the Middle East and the effective closure of the Strait of Hormuz, there is a possibility that the Middle Eastern LPG exporting countries might put further expansion of their production and export facilities on hold. Nevertheless, the exports from the US are still going strong, and the missing volumes from the Middle East are, in part, being compensated by the US.
Demand for LPG
According to Drewry (3), the demand for LPG is forecasted to grow by 6 per cent in 2026. It is worth noting that China and India, and in general the Asian region, are the top consumers of LPG. FGE (4) advised that the Asian region was the top consumer of LPG in 2023:
Source: FGE
This trend shall continue in the upcoming years (4):
Source: FGE
Now, according to Dorian LPG Ltd (1) and their analysis, the import of LPG to Asia is expected to grow by 10 per cent (versus 2025):
Source: Dorian LPG Ltd., Investor Presentation, February 5, 2026
As you can see, the demand picture remains constructive.
Analysis of the current VLGC fleet
As Dorian LPG Ltd.’s fleet consists only of VLGC, we shall focus on this segment of the global LPG fleet. In 2025, 12 VLGCs were delivered, and the global fleet made up 412 carriers:
Source: Internal analysis
As you can see, the trend of new VLGC deliveries is slated to continue. However, according to Dorian LPG Ltd. (1), around 17 per cent of the global VLGC fleet is 20+ years old:
Source: Dorian LPG Ltd., Investor Presentation, February 5, 2026
And these old units might be potential candidates for scrapping/demolition.
Risks
The major risk, which should be mentioned, is related to the global demand for LPG. Due to the current situation in the Middle East and the effective closure of the Strait of Hormuz, which is the passage for 40 per cent of the global LPG supply and export (6), the elevated prices of LPG and LPG transportation costs might have a negative effect on Asian economies, which are the major consumers of LPG. This, in turn, may reduce the demand for LPG and thereby reduce the seaborne volumes of LPG. The daily earnings/TCE are correlated with the demand for LPG, and if the demand falls, there might be a negative impact on revenues, net income and FCF of Dorian LPG Ltd.
The second important aspect is related to the delivery of new VLGC vessels. According to Drewry (5), due to the above fundamental factor, there might be a 5 per cent decline in VLGC time charter rates:
Source: Drewry Maritime Research
The above poses another risk for the company’s financial performance, affecting its metrics and profitability.
One shall bear in mind the above two vital risks.
Now, let’s evaluate the stock and see whether its intrinsic value offers good returns.
Stock valuation
Let’s start with the NAV (net asset value) per share:
Source: Internal analysis
We got USD 33.51 per share.
Now, let’s look at EPS for FY2027 as it started on Apr 1, 2026 (conservative inputs):
Source: Internal analysis
We get the total EPS of 3.83 for FY2027. If we multiply it by the average P/E ratio of the stock for 2025, we get:
3.83 (EPS) x 10.40 (average P/E ratio for 2025) = USD 39.83 per share
If we take the average of our NAV and price per share calculations as per above, we get USD 36.67 per share.
According to analysts, the 12-month price target is USD 37.60-38.00 per share and if compared to the current price, we get a fairly valued stock with no upside for value investing:
Source: Yahoo Finance
As we can see, the stock price has already priced in all fundamental factors laid out above by us in the previous sections.
As of now, the stock shall be put in a file called “High risk/low reward”, and we shall wait till the stock offers us better returns.
But as I mentioned before, it is up to you, my fellow value investors, to decide how a position fits your portfolio, considering your risk/reward perspective.
If you have any questions, please contact me or leave comments, and I shall do my best to shed light on the matter.
Thank you for reading,
Value Investor in Shipping
Disclaimer: It is not financial advice but a research-based fundamental analysis.
Substack link: https://valueinvestinginshipping@substack.com
Sources:
1 Dorian LPG Ltd., Investor Presentation, February 5, 2026
2 Dorian LPG Ltd., Q3 FY2026 Earnings Call
3 https://www.balticexchange.com/en/data-services/routes.html
4 https://www.fgenergy.com/ngls/ngl-annual-reports/the-lpg-forecast-2025-edition