Petronet LNG - Q4FY20 First Cut - ICICI Securities

(CMP: Rs. 263; Market Cap: Rs. 39428 crore)

Petronet LNG reported its Q4FY20 result, which was below our estimates on profitability front. The topline increased 2.2% YoY to Rs. 8567.2 crore above our estimates of Rs. 7921.7 crore mainly on account of better than estimated volume. The total volumes increased 6.8% YoY and were down 6% QoQ to 219 tbtu and came above our estimates of 211.5 tbtu. Blended margins stood at Rs. 51.7/mmbtu (our estimate: Rs. 54/mmbtu). We await management commentary on reduction in margins and high other expenses of Rs. 404.8 crore. EBITDA was at Rs. 697.5 crore below our estimate of Rs. 978.2 crore. On account of same, PAT came in at Rs. 359 crore, below our estimates of Rs. 577.4 crore.

Q4FY20 Earnings Summary

- Petronet LNG reported an increase of 2.2% YoY in revenues to Rs. 8567.2 crore above our estimates of Rs. 7921.7 crore mainly on account of higher volume of LNG sales

- Total sales volume stood at 219 tbtu above our estimates of 211.5 tbtu

- The blended margins stood at Rs. 51.7/mmbtu (our estimates: Rs. 54/mmbtu). We await management commentary on reduction in margins. EBITDA came in at Rs. 697.5 crore below our estimate of Rs. 978.2 crore as the company reported higher other expense at Rs. 404.8 crore (our estimate: Rs. 126.7 crore)

- On account of the same, PAT came in at Rs. 359 crore, down 18.4% YoY below our estimates of Rs. 577.4 crore

Petronet LNG remains a structural story of India's increasing gas demand. With India continuing to be significantly short of natural gas supply, Petronet LNG will benefit as the primary play on increasing usage of LNG. In the current quarter, LNG demand was significantly affected in April during the lockdown. We seek management commentary on outlook ahead as growth in both contracted LNG sales as well as regas volumes and stability in blended margins is important going forward.

We will be coming out with the detailed report post the conference call.

Shares of PETRONET LNG LTD. was last trading in BSE at Rs.257.65 as compared to the previous close of Rs. 258.1. The total number of shares traded during the day was 146681 in over 3034 trades.

The stock hit an intraday high of Rs. 260.8 and intraday low of 252.5. The net turnover during the day was Rs. 37686644.

Source : Equity Bulls

Keywords