Q3FY21 Result Update - Petronet LNG - ICICI Direct

Petronet LNG reported a mixed set of Q3FY21 numbers. While sales volume was below estimates, blended margins were ahead of expectations. Total volumes were flattish YoY and down 7.5% QoQ to 235 tbtu due to lower regas volumes. Revenues were down 17.8% YoY to Rs. 7328.2 crore (I-direct estimate: Rs. 7591 crore). EBITDA was Rs. 1335.3 crore, up 20.6% YoY, down 2% QoQ (our estimate: Rs. 1215.4 crore). Blended margins were at Rs. 63.2/mmbtu on account of inventory gains and higher margin on spot volumes (our estimate: Rs. 54.8/mmbtu). PAT increased 30.1% YoY to Rs. 878.5 crore (our estimate: Rs. 761.7 crore). On a QoQ basis, it dipped 5.3%.

Valuation & Outlook

Petronet LNG provides comfort on the business model and remains a structural story of India's increasing gas demand. With government's aim to increase share of natural gas to 15% in energy basket, Petronet LNG will benefit as the primary play on increasing usage of LNG. On the new project front, the management said the company is exploring opportunity to set up an import terminal on the east coast of India and a FSRU in Sri Lanka. At Dahej terminal, capex up to 22.5 MMT is planned in a phase wise manner over next four to five years. However, in the medium term, additional capacity from new terminals on the west coast (Mundra, Dabhol) poses risk to further volume growth. Additional domestic gas from newer fields will also take a share of gas consumption in next one to two years. We roll over valuations to FY23E and maintain HOLD rating on the stock. We value the stock at 11.5x FY23E EPS of Rs. 24 to arrive at a TP of Rs. 275 (earlier: Rs. 275).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_PetronetLNG_Q3FY21.pdf

Shares of PETRONET LNG LTD. was last trading in BSE at Rs.240.5 as compared to the previous close of Rs. 242.1. The total number of shares traded during the day was 128593 in over 1915 trades.

The stock hit an intraday high of Rs. 245.8 and intraday low of 239.25. The net turnover during the day was Rs. 30999491.

Source : Equity Bulls

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