Petronet LNG Limited - Growth at the fag-end - 1QFY14 Results Review - Antique

Petronet LNG Ltd (PLNG) reported a 1QFY14 net profit of INR2.25bn, down 17% YoY and 8% QoQ. PAT was 15% lower than our estimate due to 22% QoQ decline in spot volumes to 19tbtu. Capacity utilization of Dahej terminal was 102% with total 129.5tbtu volumes processed. Calculated marketing margins declined 19% QoQ to ~INR46/mmbtu. In 1Q sharp rupee depreciation offset decline in spot LNG prices thereby resulting in a weak demand scenario. Power sector LNG demand in Gujarat was further affected by cheaper coal prices. Earnings were also dented by higher internal consumption.

Cutting estimates, Maintain BUY with revised target price of INR162/sh

We lower our FY14/15 EPS by 10%/5% assuming lower volumes and marketing margins. We believe the case for LNG is strong in the country with domestic gas supplies likely to remain tepid over the medium term though near term utilization concerns in Kochi terminal could limit stock upside until clarity on GAIL's pipeline emerges. Maintain BUY with INR162 revised target price.

Source : Equity Bulls

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