India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Petronet LNG -3QFY11 results
Petronet’s 3QFY11 net profit rose 30%QoQ to Rs1.7bn – 21% ahead of
estimates on the back of higher than expected volumes. Building this in,
we increase our FY11 volume estimate to 8.4mt and upgrade EPS forecast
by 10%. A benign global gas environment and flat domestic production
bodes well for PLNG but this is factored into the stock which is trading
one standard deviation above its historical averages. Maintain U-PF.
3QFY11 net profit came 21% above estimates
PLNG’s 3QFY11 net profit rose by 105%YoY/30%QoQ to Rs1.7bn (Rs2.28/sh)
and came 21% ahead of our estimate. Higher than expected volumes
(120trbtu cf. 109trbtu) drove this strong performance. Long term volume of
100trbtu was higher than our estimated 95tbtu and offsets the shortfall of
1Q. PLNG also gained trading margin on 11trbtu of spot cargoes. Inventory
gains continue to help as LNG import prices are being reset every month.
Increasing FY11 EPS estimate by 10%
Building in this strong quarter, we are increasing our full year FY11 volume
estimate to 8.4mt leading to a 10% increase in our FY11 EPS forecast to
Rs7.6. PLNG has already achieved 72% of this revised estimate in 9MFY11.
The company has also announced a short term contract of 1.1mtpa for FY12
and FY13. Given that we already build in 2.4mt and 3.4mt of volumes for
FY12 and 13 respectively other than the 7.5mtpa long term contract from
RasGas, we have not changed estimates for the next 2 years.
50% capacity expansion in three years.
PLNG’s Kochi project is on track for completion in 4Q-2012. The company has
recently approved the expansion of capacity at Kochi to 6mtpa. Moreover,
PLNG has also awarded the contract for the second jetty at Dahej; when
complete this will help increase capacity from 10mt to 13mt. Together with
Kochi, therefore, we expect PLNG’s capacity to rise from 10mt to 15.5mt by
2013 and 19mtpa after the recently announced expansion at Kochi.
Maintain U-PF (-9%)
Rising capacity, a benign global gas regime and a flat domestic production
over next year bodes well for PLNG but at 16x Mar12PE (over one standard
deviation higher than its historic averages), this is largely factored into the
stock. Further, while we forecast a 23% EPS Cagr over FY10-12, this is
contingent on volatile spot/ short term cargoes – long term contracts remain
elusive and are not imminent. Higher re-gas charges is a key risk; we assume
a 10% cut in 2012 – every 5ppt impacts EPS by 10%. Maintain U-PF (-9%)
No comments:
Post a Comment