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P e r f o r m a n c e a s p e r e x p e c t a t i o n s …
Petronet LNG reported strong Q1FY12 numbers with revenues increasing
75.5% YoY to | 5366.9 crore while PAT nearly doubled from | 131.1 crore
in Q2FY11 to | 260.3 crore in Q2FY12. The reported profit was higher
than our estimates mainly on account of higher short-term and spot
margins. Regasification services volumes were 17.2 tbtu vs. 0.3 tbtu YoY,
which also contributed towards the profitability. LNG volumes increased
35.4% YoY to 135.1 tbtu in Q2FY12. LNG volumes are expected to remain
firm in the coming quarters on account of lower domestic volumes and
buoyant demand. We estimate LNG volume of 548.9 tbtu and 580.3 tbtu
in FY12E and FY13E, respectively. Blended net regasification margins
increased from | 30.4 per mmbtu in Q2FY11 to | 40.9 per mmbtu in
Q2FY12. Gross regasification margins increased 5% YoY to | 33.4 per
mmbtu in Q4FY11. We have factored in 5% higher regasification margin
in CY12 at the Dahej terminal and flat thereafter. We have conservatively
estimated Kochi gross regasification margins at | 60 per mmbtu. We
recommend a HOLD rating with a price target of | 175.
ƒ Highlights of the quarter
Petronet LNG reported a 35.4% increase in LNG volume from 99.8
tbtu in Q2FY11 to 135.1 tbtu in Q2FY12 on account of higher spot
and regasification services volumes during the quarter. The volume
for regasification services stood at 17.2 tbtu in Q2FY12 (18.7 tbtu in
Q1FY12). The setting up of the Kochi terminal at 5 MMTPA is
progressing as per schedule. We expect it to start commercial
operation in Q4FY13E. The new jetty at the Dahej terminal would be
ready for commissioning in FY14E. Petronet has completed the
feasibility study for another 5 MMTPA terminal at Dahej and expects
Board approval soon. The Board would start internal feasibility for
setting up a new 5 MMTPA LNG terminal in the east coast of India.
V a l u a t i o n
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 – 10.8%, terminal growth -2%) to arrive at a target price of | 175.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
P e r f o r m a n c e a s p e r e x p e c t a t i o n s …
Petronet LNG reported strong Q1FY12 numbers with revenues increasing
75.5% YoY to | 5366.9 crore while PAT nearly doubled from | 131.1 crore
in Q2FY11 to | 260.3 crore in Q2FY12. The reported profit was higher
than our estimates mainly on account of higher short-term and spot
margins. Regasification services volumes were 17.2 tbtu vs. 0.3 tbtu YoY,
which also contributed towards the profitability. LNG volumes increased
35.4% YoY to 135.1 tbtu in Q2FY12. LNG volumes are expected to remain
firm in the coming quarters on account of lower domestic volumes and
buoyant demand. We estimate LNG volume of 548.9 tbtu and 580.3 tbtu
in FY12E and FY13E, respectively. Blended net regasification margins
increased from | 30.4 per mmbtu in Q2FY11 to | 40.9 per mmbtu in
Q2FY12. Gross regasification margins increased 5% YoY to | 33.4 per
mmbtu in Q4FY11. We have factored in 5% higher regasification margin
in CY12 at the Dahej terminal and flat thereafter. We have conservatively
estimated Kochi gross regasification margins at | 60 per mmbtu. We
recommend a HOLD rating with a price target of | 175.
ƒ Highlights of the quarter
Petronet LNG reported a 35.4% increase in LNG volume from 99.8
tbtu in Q2FY11 to 135.1 tbtu in Q2FY12 on account of higher spot
and regasification services volumes during the quarter. The volume
for regasification services stood at 17.2 tbtu in Q2FY12 (18.7 tbtu in
Q1FY12). The setting up of the Kochi terminal at 5 MMTPA is
progressing as per schedule. We expect it to start commercial
operation in Q4FY13E. The new jetty at the Dahej terminal would be
ready for commissioning in FY14E. Petronet has completed the
feasibility study for another 5 MMTPA terminal at Dahej and expects
Board approval soon. The Board would start internal feasibility for
setting up a new 5 MMTPA LNG terminal in the east coast of India.
V a l u a t i o n
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 – 10.8%, terminal growth -2%) to arrive at a target price of | 175.
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