Petronet LNG 2QFY12: Strong operational delivery continues ::JPMorgan,

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PLNG net profit of Rs2.6bn (+99%y/y) was ahead of our and consensus
expectations. LNG volumes were higher-than-expected and were the key
reason for the beat. We are more positive towards the stock post the 8%
correction over the last month and robust near-term outlook on LNG
volumes.
 Sustaining high utilizations… PLNG Dahej utilization levels continued
to be high at 106% and management guided that this is likely to sustain
over the next quarter based on tied-up spot volumes. Recent dip in spot
LNG prices, coupled with coal shortages and high merchant power
prices also makes us more sanguine on LNG offtake over the near-term.
 ..and robust marketing margins: Marketing margins were in-line with
1Q levels and management guidance. Average EBITDA/mmbtu of
Rs33.2 was marginally higher than last quarter levels. Reported other
expenditure contained an element of foreign exchange loss of Rs530m
pertaining to raw materials.
 Projects running on schedule. Kochi terminal is expected to be
commercialized in 4QCY12, with some volumes starting to come into
the terminal in 3Q; the second jetty at Dahej will be completed by Oct-
Nov 2013. Capex on Kochi is expected to be contained at Rs42bn and
for the Jetty at Rs9bn.
 Maintain PT of Rs190. We marginally adjust FY12 earnings by 3% on
lower-than-anticipated finance charges. We however continue to hold
our full year volume expectation at 10.5mMT (105% utilization) - the
coming quarters should see larger LT volumes, which would lower spot
berths - unless utilization levels are upped further. Our PT now provides
16% potential upside to the stock – we would be buyers of the stock at
Rs150-155 levels.