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Petronet LNG’s (PLNG’s) Q3FY12 result was significantly better than our expectation
on the EBITDA and bottom-line front. Top-line registered a growth of 74.5% YoY to
Rs63.3bn (Rs36.3bn) on account of 20.8% YoY growth in volumes, coupled with
43.9% YoY growth in realisations. EBITDA/TBTU witnessed an expansion, from
Rs33.2/TBTU in Q2FY12 to Rs34.7/TBTU in Q3FY12. Bottom-line, during the quarter,
stood at Rs2,953m (Rs1,708m), registering an increase of 72.9% YoY v/s our
expectation of Rs2,495m during the quarter.
Performance led by spot marketing margins: Our calculation suggests that the
company made gross marketing profits on spot volumes of Rs1,757m (28.0% of
the reported gross margins for the quarter). The share of marketing margins in
overall gross margins has increased from 11% in Q3FY11 to 28% in Q3FY12. We
believe, PLNG has witnessed a 39% QoQ growth in marketing margins from
US$1.0/mmbtu (Q2FY12 to US$1.39/mmbtu (Q3FY12). Volumes during Q2FY12
were at 145TBTU (120TBTU); the same were slightly higher than our estimate of
142TBTU. PLNG imported around 45 cargoes in the quarter compared to 42
cargoes handled in Q2FY12.
Outlook: PLNG’s utility nature of business (stable re-gasification margins and
term contracts), low regulatory risks (re-gasification margins are not currently
under PNGRB’s purview) and expanding volumes on account of strong demand
estimates, hold it in good stead. We have increased our marketing margins
assumption for the on account of strong demand. We believe that continued
strength in the marketing margins on the spot volumes, coupled with positive
news-flow pertaining to Kochi terminal, is likely to provide positive catalyst to
the stock price. We maintain ‘BUY’, with a DCF-based target price of
Rs197/share, implying a P/E of 12.6x FY13E.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Petronet LNG’s (PLNG’s) Q3FY12 result was significantly better than our expectation
on the EBITDA and bottom-line front. Top-line registered a growth of 74.5% YoY to
Rs63.3bn (Rs36.3bn) on account of 20.8% YoY growth in volumes, coupled with
43.9% YoY growth in realisations. EBITDA/TBTU witnessed an expansion, from
Rs33.2/TBTU in Q2FY12 to Rs34.7/TBTU in Q3FY12. Bottom-line, during the quarter,
stood at Rs2,953m (Rs1,708m), registering an increase of 72.9% YoY v/s our
expectation of Rs2,495m during the quarter.
Performance led by spot marketing margins: Our calculation suggests that the
company made gross marketing profits on spot volumes of Rs1,757m (28.0% of
the reported gross margins for the quarter). The share of marketing margins in
overall gross margins has increased from 11% in Q3FY11 to 28% in Q3FY12. We
believe, PLNG has witnessed a 39% QoQ growth in marketing margins from
US$1.0/mmbtu (Q2FY12 to US$1.39/mmbtu (Q3FY12). Volumes during Q2FY12
were at 145TBTU (120TBTU); the same were slightly higher than our estimate of
142TBTU. PLNG imported around 45 cargoes in the quarter compared to 42
cargoes handled in Q2FY12.
Outlook: PLNG’s utility nature of business (stable re-gasification margins and
term contracts), low regulatory risks (re-gasification margins are not currently
under PNGRB’s purview) and expanding volumes on account of strong demand
estimates, hold it in good stead. We have increased our marketing margins
assumption for the on account of strong demand. We believe that continued
strength in the marketing margins on the spot volumes, coupled with positive
news-flow pertaining to Kochi terminal, is likely to provide positive catalyst to
the stock price. We maintain ‘BUY’, with a DCF-based target price of
Rs197/share, implying a P/E of 12.6x FY13E.
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