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Petronet LNG- Strong quarter…
Petronet LNG reported strong Q4FY11 numbers with revenues increasing
67.1% YoY to | 3986 crore while PAT more than doubled from | 97.3
crore in Q4FY10 to | 206.3 crore in Q4FY11. The reported profits were
higher than our estimates mainly on account of higher regasification
services volumes (13.6 tbtu vs. 8.6 tbtu QoQ) during the quarter. The LNG
volumes increased 37% YoY to 125.8 tbtu in Q4FY11. The LNG volumes
are expected to remain firm in the coming quarters on account of lower
domestic volumes. We estimate LNG volumes of 528.6 tbtu and 600 tbtu
in FY12E and FY13E, respectively. The blended net regasification margins
increased from | 26.6 per mmbtu in Q4FY10 to | 32.7 per mmbtu in
Q4FY11. The gross regasification margin increased by 5% QoQ to | 33.4
per mmbtu in Q4FY11. We have factored in flat regasification margins at
the Dahej terminal from hereon. We have conservatively estimated Kochi
gross regasification margins at | 60 per mmbtu. We recommend a HOLD
rating on the stock with a price target of | 148.
�� Highlights of the quarter
Petronet LNG reported a 37% increase in LNG volumes from 91.8
tbtu in Q4FY10 to 125.8 tbtu in Q4FY11 on account of higher spot
and regasification services volumes during the quarter. The volume
for regasification services stood at 13.6 tbtu in Q4FY11 (8.6 tbtu in
Q3FY11). The expansion of the Kochi terminal to 5 MMTPA, which
had been approved by the Petronet board, is going as per schedule.
We expect the initial 2.5 MMTPA Kochi terminal to get
commissioned in Q1FY13E. The Board has also decided to set up a
new LNG terminal on the east coast of India but the details are yet to
be finalised and would be decided in due course.
Valuation
Petronet LNG’s business of receiving and regasification of LNG along with
back-to-back long-term purchase and sales agreement offers a lot of
safety to investors. We have valued the stock based on DCF methodology
(WACC – 10%, terminal growth -2%) to arrive at a target of | 148.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Petronet LNG- Strong quarter…
Petronet LNG reported strong Q4FY11 numbers with revenues increasing
67.1% YoY to | 3986 crore while PAT more than doubled from | 97.3
crore in Q4FY10 to | 206.3 crore in Q4FY11. The reported profits were
higher than our estimates mainly on account of higher regasification
services volumes (13.6 tbtu vs. 8.6 tbtu QoQ) during the quarter. The LNG
volumes increased 37% YoY to 125.8 tbtu in Q4FY11. The LNG volumes
are expected to remain firm in the coming quarters on account of lower
domestic volumes. We estimate LNG volumes of 528.6 tbtu and 600 tbtu
in FY12E and FY13E, respectively. The blended net regasification margins
increased from | 26.6 per mmbtu in Q4FY10 to | 32.7 per mmbtu in
Q4FY11. The gross regasification margin increased by 5% QoQ to | 33.4
per mmbtu in Q4FY11. We have factored in flat regasification margins at
the Dahej terminal from hereon. We have conservatively estimated Kochi
gross regasification margins at | 60 per mmbtu. We recommend a HOLD
rating on the stock with a price target of | 148.
�� Highlights of the quarter
Petronet LNG reported a 37% increase in LNG volumes from 91.8
tbtu in Q4FY10 to 125.8 tbtu in Q4FY11 on account of higher spot
and regasification services volumes during the quarter. The volume
for regasification services stood at 13.6 tbtu in Q4FY11 (8.6 tbtu in
Q3FY11). The expansion of the Kochi terminal to 5 MMTPA, which
had been approved by the Petronet board, is going as per schedule.
We expect the initial 2.5 MMTPA Kochi terminal to get
commissioned in Q1FY13E. The Board has also decided to set up a
new LNG terminal on the east coast of India but the details are yet to
be finalised and would be decided in due course.
Valuation
Petronet LNG’s business of receiving and regasification of LNG along with
back-to-back long-term purchase and sales agreement offers a lot of
safety to investors. We have valued the stock based on DCF methodology
(WACC – 10%, terminal growth -2%) to arrive at a target of | 148.
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