Strong trading margins boosts earnings
PLNG’s Q2FY13 net profit of Rs3.1bn was significantly higher than our estimate of Rs2.7bn on account of high trading margins (implied) of Rs45.8/mmbtu (our estimate: Rs33/mmbtu) and increase in spot volumes. Gas volumes witnessed a sequential growth of 6.2% to 135tbtu (yoy -0.1%) driven by lower price of LNG which led to healthy increase in demand from consuming sectors and resumption of power and fertiliser plants which were shutdown for annual maintenance in the previous quarter. Operating profit of Rs5.2bn was higher than our estimate of Rs4.6bn. Operating margin for the quarter of 6.9% (yoy -149bps qoq +37bps) was higher than our estimate of 6.5%. We have increased our earnings estimate for FY13e by 11.7% considering the high trading margins the company has been able to earn in H1FY13. We maintain our BUY rating on PLNG with a revised price target of Rs187. At the CMP, the stock is trading at 11.2x and 6.5x FY14e EPS and EBITDA respectively.
Actual v/s Estimates
Y/E, Mar (Rs. m)
|
Q2FY13
|
Q1FY13
|
qoq (%)
|
Q2FY12
|
yoy (%)
|
LKP Estimates
|
Deviation (%/bps)
|
Revenue
|
75,486
|
70,304
|
7.4%
|
53,669
|
40.7%
|
71,116
|
6.1%
|
EBITDA
|
5,184
|
4,571
|
13.4%
|
4,484
|
15.6%
|
4,624
|
12.1%
|
EBITDA (%)
|
6.9%
|
6.5%
|
37 bps
|
8.4%
|
-149 bps
|
6.5%
|
37 bps
|
PAT
|
3,148
|
2,708
|
16.2%
|
2,603
|
20.9%
|
2,683
|
17.3%
|
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