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Petronet LNG-Profitability above estimates…
Petronet LNG’s revenues for Q3FY11 increased 61.6% YoY to | 3628
crore while PAT more than doubled from | 83.2 crore in Q3FY10 to |
170.8 crore in Q3FY11. The reported revenues were higher than our
estimates on account of higher spot and regasification services volumes
during the quarter. LNG volumes increased 25.7% YoY to 119.7 tbtu in
Q3FY11. Profitability was much higher than our estimates mainly due to
additional trading margins on spot volumes. We estimate LNG volume
of 435.6 tbtu, 502.2 tbtu and 573.6 tbtu, respectively, in FY11E, FY12E
and FY13E. Blended net regasification margins increased from | 25.4 per
mmbtu in Q3FY10 to | 32.5 per mmbtu in Q3FY11. Gross regasification
margins stood flat QoQ at | 31.8 per mmbtu in Q3FY11. We have
factored in a 5% increase in regasification margin at the Dahej terminal
till CY11 and, flat, thereafter. We have conservatively estimated Kochi
gross regasification margins at | 60 per mmbtu. We recommend a BUY
rating on the stock with a price target of | 148.
ƒ Highlights of the quarter
Petronet LNG reported a 27.5% increase in LNG volume from 95.2
tbtu in Q3FY10 to 119.7 tbtu in Q3FY11 on account of higher spot
and regasification services volumes during the quarter. The volume
for regasification services stood at 8.6 tbtu in Q3FY11 (0.3 tbtu in
Q2FY11). The company has signed agreements to source and
offtake additional 1.1 MMTPA (57.2 tbtu) each for FY12 and FY13.
The Petronet board has approved expansion of the Kochi terminal to
5 MMTPA and construction is as per schedule. We expect the initial
2.5 MMTPA Kochi terminal to get commissioned in Q1FY13E.
Valuation
Petronet LNG’s business of receiving and regasification of LNG and backto-back long-term purchase and sales agreement offers a lot of safety for
investors. We have valued the stock based on DCF methodology (WACC
– 10%, terminal growth -2%) to arrive at a target price of | 148.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Petronet LNG-Profitability above estimates…
Petronet LNG’s revenues for Q3FY11 increased 61.6% YoY to | 3628
crore while PAT more than doubled from | 83.2 crore in Q3FY10 to |
170.8 crore in Q3FY11. The reported revenues were higher than our
estimates on account of higher spot and regasification services volumes
during the quarter. LNG volumes increased 25.7% YoY to 119.7 tbtu in
Q3FY11. Profitability was much higher than our estimates mainly due to
additional trading margins on spot volumes. We estimate LNG volume
of 435.6 tbtu, 502.2 tbtu and 573.6 tbtu, respectively, in FY11E, FY12E
and FY13E. Blended net regasification margins increased from | 25.4 per
mmbtu in Q3FY10 to | 32.5 per mmbtu in Q3FY11. Gross regasification
margins stood flat QoQ at | 31.8 per mmbtu in Q3FY11. We have
factored in a 5% increase in regasification margin at the Dahej terminal
till CY11 and, flat, thereafter. We have conservatively estimated Kochi
gross regasification margins at | 60 per mmbtu. We recommend a BUY
rating on the stock with a price target of | 148.
ƒ Highlights of the quarter
Petronet LNG reported a 27.5% increase in LNG volume from 95.2
tbtu in Q3FY10 to 119.7 tbtu in Q3FY11 on account of higher spot
and regasification services volumes during the quarter. The volume
for regasification services stood at 8.6 tbtu in Q3FY11 (0.3 tbtu in
Q2FY11). The company has signed agreements to source and
offtake additional 1.1 MMTPA (57.2 tbtu) each for FY12 and FY13.
The Petronet board has approved expansion of the Kochi terminal to
5 MMTPA and construction is as per schedule. We expect the initial
2.5 MMTPA Kochi terminal to get commissioned in Q1FY13E.
Valuation
Petronet LNG’s business of receiving and regasification of LNG and backto-back long-term purchase and sales agreement offers a lot of safety for
investors. We have valued the stock based on DCF methodology (WACC
– 10%, terminal growth -2%) to arrive at a target price of | 148.
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