Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  
Google
Web www.equitybulls.com
Research

| More

Petronet LNG - Likely large capex adds to concerns - ICICI Securities

Posted On: 2021-06-10 14:40:36 (Time Zone: UTC)


Petronet LNG's (PLNG) Q4 and FY21 consolidated EPS was up 71-27% YoY, driven by jump in Dahej regas charge. Dahej utilisation was the lowest in three quarters at 93% in Q4 (97% in FY21) hit by spot LNG surge in Jan'21. We have cut FY22E Dahej and Kochi utilisation to factor the impact from covid, high spot LNG price and rise in domestic gas output. We are assuming flat Kochi regas charge in FY22E; offtakers want it to be cut by 35% to same level as Dahej. These changes have led to a cut in FY22E EPS by 12% and target price by 15% to Rs213 (7% downside). Surge in capex (Rs187bn in next five years) and Dahej utilisation being capped by rise in domestic gas output and LNG import capacity in Gujarat are the other concerns. We, therefore, downgrade PLNG to REDUCE from Hold.

- Q4 EPS up 71%: Q4FY21 standalone EPS was up 74% YoY driven by 16% YoY jump in Dahej regas charge and 21% YoY fall in interest cost. Dahej volumes were down 1% YoY and 8% QoQ and at the lowest level in three quarters (eight quarter low if covid-hit Q1FY21 excluded) in Q4. Kochi volumes were up 8% YoY and QoQ. Q4 consolidated EPS was up 71% YoY with profit share of investee up just 3% to Rs146mn. FY21 standalone and consolidated EPS is up 27% YoY as rise in regas charge more than made up for volume fall.

- Earnings call takeaways: 1) Capex could be as high as Rs187bn in the next five years; Rs67bn is guided on expanding capacity, adding jetty and tanks at Dahej and Kochi, and on new East coast terminal, Rs80bn on 1,000 LNG stations and Rs40bn on compressed biogas; 2) capex is guided at Rs5.3-10bn in FY22-FY23E and Rs30- 40bn pa thereafter; 3) offtakers want Kochi regas charge to be cut to Rs54/mmbtu (same as in Dahej) but PLNG in unwilling to go below Rs83.1/mmbtu; 3) Dahej utilisation was hit in Apr-May'21 by covid second wave and high spot LNG prices but is up to 88% now; 4) Dahej utilisation is guided at 90-95% and that of Kochi at 25-30% in FY22E.

- Dahej utilisation cut to 92-91% in FY22-FY23E: Rise in domestic gas output by 25-45mmscmd by end-FY22-FY24E (already up 18mmscmd) and LNG import capacity by 12mmtpa in Gujarat in FY23E is likely to hit Dahej utilisation. Three players, who have booked capacity on Dahej, have also booked 4.5mmtpa on Swan terminal, which is likely to be commissioned in CY22E despite May'21 cyclone Tauktae causing some damage. LNG imports by these players at Dahej were 0.8-0.5mmt higher than booked capacity in FY20-FY21. Once Swan starts, imports at Dahej are therefore likely to fall. We estimate Dahej volume fall to 16.1-15.75mmt, implying 92-90% utilisation in FY22-FY24E.

- Cut FY22E EPS & target price by 12-15%: Dahej and Kochi utilisation cut to 92-25% vs 100-27% earlier, cut in other income by 32% (up 12% YoY) and assuming YoY flat Kochi regas charge (vs up 5% earlier) has led to cut in FY22E EPS by 12% and target price by 15% to Rs213. Kochi regas charge cut to same level as Dahej would mean 5% downside to FY22-FY23E EPS and 2% to FV to Rs209.

Shares of PETRONET LNG LTD. was last trading in BSE at Rs.232.25 as compared to the previous close of Rs. 228.55. The total number of shares traded during the day was 954679 in over 11036 trades.

The stock hit an intraday high of Rs. 233.4 and intraday low of 227. The net turnover during the day was Rs. 220786893.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.


Other Headlines:

CESC Q4FY21 Results Review Report - Loss decline, strong CF make valuation attractive - HDFC Securities

White Goods & Durables - Analysis of pressure cooker market: TTK Prestige is key beneficiary - ICICI Securities

CESC - Good earnings in a challenging environment - ICICI Securities

Somany Ceramics - Walking the talk - ICICI Securities

DB Corp - Rise in newsprint price adds to risk - ICICI Securities

CEAT - Market share ambitions remain strong - ICICI Securities

Consumer Staples & Discretionary - Worm's world view #32: Conversations with paint dealers regarding price hikes - ICICI Securities

Oil & Gas - Oil, gas & spot LNG surge to bring gains for GAIL & OIL - ICICI Securities

Asset Management Companies - Positive trends to support earnings - ICICI Securities

Q4FY21 Result Update - Lemon Tree Hotels - ICICI Direct

Q4FY21 Company Update - Globus Spirits - ICICI Direct

Q4FY21 Result Update - DB Corp - ICICI Direct

Q4FY21 Result Update - Somany Ceramics - ICICI Direct

KEC International: Company Update - Building on diversification - HDFC Securities

LIC Housing Finance - Q4 FY21 Result Update - YES Securities

Entertainment Network Ltd - Beating on solutions business - ICICI Securities

Asahi India Glass - Operating leverage, product mix aid margins - ICICI Securities

Whirlpool of India - Market leading revenue growth - ICICI Securities

Lemon Tree Hotels - Wait for recovery gets longer - ICICI Securities

LIC Housing Finance - Stupendous growth momentum; needs to shore up provisioning and capital buffer - ICICI Securities

Quant Pick - Bank of Baroda - ICICI Direct

Company Update - Amara Raja Batteries - Investor Event Outcome - ICICI Direct

Q4FY21 Result Update - Bhel - ICICI Direct

Q4FY21 Company Update - NRB Bearings - ICICI Direct

CESC - Q4FY21 First Cut - ICICI Direct

Q4FY21 Result Update - Entertainment Network India - ICICI Direct

LIC Housing Finance Results Review Report - Balance sheet beefs up; P&L to stay soft - HDFC Securities

Jubilant FoodWorks 4QFY21 Results Review Report - Missing excitement; recovery priced in - HDFC Securities

BFSI Sector Update - MFI Consultation Paper Takeaways - Incrementally positive for NBFC-MFIs - HDFC Securities

Q4FY21 Result Update - JK Cement - ICICI Direct

Q4FY21 Result Update - Minda Industries - ICICI Direct

Stock Tales - Indo Count Industries - ICICI Direct

IPO Review - Krishna Institute of Medical Sciences Ltd - ICICI Direct

Q4FY21 Company Update - Greenply Industries - ICICI Direct

IPO Review - Dodla Dairy Ltd - ICICI Direct

Lemon Tree Hotels - Q4FY21 First Cut - ICICI Direct

Jubilant Foodworks - Q4FY21 investor call takeaways - YES Securities

Greenply Industries Ltd - Q4 FY21 Result Update - YES Securities

Whirlpool of India Ltd - Q4 FY21 Result Update - YES Securities

New India Assurance Report - CoRs disappoint yet again - HDFC Securities

Maintain BUY on Kajaria Ceramics - Performance shines through; outlook bright - HDFC Securities

Retain ADD on Deccan Cement - Volume strong; high other expense dents margin - HDFC Securities

Reiterate ADD on NHPC - Lower generation impacts earnings - HDFC Securities

Maintain BUY on JK Cement - Robust volume and utilisation - HDFC Securities

Maintain BUY on DLF - Gaining traction - HDFC Securities

Maintain BUY on Capacite Infraprojects - Marginal miss - HDFC Securities

DLF Ltd - Q4 FY21 Result Update - YES Securities

Greenply Industries Ltd - Q4FY21 first cut - YES Securities

Coal India - Coal makes a comeback - ICICI Securities

Kajaria Ceramics - Q4FY21 beat largely priced in - ICICI Securities


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020