Petronet LNG - Q1FY21 Result Update - ICICI Securities

Petronet LNG reported its Q1FY21 results that were better than our estimates on the volumes and profitability front. Volumes fell 15.9% YoY and 13.2% QoQ to 190 tbtu (I-direct estimate: 177 tbtu) as LNG offtake was reduced during lockdown. Revenues were down 43% QoQ to Rs. 4883.6 crore (I-direct estimate: Rs. 6411.8 crore). Blended margins were at Rs. 55.1/mmbtu, above estimate of Rs. 50.7/mmbtu. EBITDA was up 30.5% QoQ to Rs. 909.9 crore vs. our estimate of Rs. 753.3 crore. Consequently, PAT was at Rs. 520.2 crore, up 44.9% QoQ (I-direct estimate: Rs. 394.4 crore).

Valuation & Outlook

Petronet LNG provides comfort on the business model and remains a structural story on India's increasing gas demand. With India continuing to be short of natural gas supply, Petronet LNG will benefit as the primary play on increasing usage of LNG. While volumes were impacted during the lockdown, currently Dahej terminal is operating at full capacity. On the new project front, the management indicated the company is planning to set up an import terminal on the east coast. Also, Petronet's deal with Tellurian to buy a stake and import LNG is under negotiation. At the CMP, Petronet LNG trades at an attractive 5% dividend yield. We except healthy dividend payout in future as well. We maintain BUY recommendation on the stock. We value Petronet LNG at 15x FY22E EPS of Rs. 20 to arrive at a target price of Rs. 300.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_PetronetLNG_Q1FY21.pdf

Shares of PETRONET LNG LTD. was last trading in BSE at Rs.257.95 as compared to the previous close of Rs. 254.45. The total number of shares traded during the day was 391471 in over 5355 trades.

The stock hit an intraday high of Rs. 267.7 and intraday low of 256.95. The net turnover during the day was Rs. 102036080.

Source : Equity Bulls

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