Hold Petronet LNG Ltd For Target Rs.250 - ICICI Direct
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In line performance...
Petronet LNG reported Q4FY21 results that were in line with estimates on the operating front. However, profitability was lower-than-expected on account of other income. Total volumes were flattish YoY, down 7.2% QoQ to 218 tbtu. Revenues were down 11.6% YoY to | 7575.3 crore (estimated: | 7920.2 crore). EBITDA was at | 1091.1 crore, up 56.4% YoY (our estimate: | 1107.7 crore).
Blended margins were at | 59.3/mmbtu in line with estimates. Other income at | 49.2 crore was lower than expectations of | 97.8 crore. Subsequently, PAT increased 73.6% YoY to | 623.4 crore as profitability was impacted by inventory loss and certain one-offs in the base quarter (I-direct estimate: | 685.1 crore).
Volumes to remain subdued in near term
Petronet LNG’s total volumes were marginally above our estimates. Total sales volumes came in at 218 tbtu compared to 219 tbtu in Q4FY20 (flattish YoY) and 235 tbtu in Q3FY21 (down 7.2% QoQ). While regasification volume at 98 tbtu, better than estimate of 90 tbtu, it declined 8.4% QoQ as higher spot LNG prices led to a dip in demand, mainly from the power sector. The management said that Dahej utilisation is at 88% currently. On account of reduction in demand, we expect regasification volume to remain low in the current quarter. Accordingly, we revise estimates and expect total volume at 931.6 tbtu, 996.8 tbtu for FY22E, FY23E, respectively. In terms of margins, we estimate 57.1/mmbtu, | 60.2/mmbtu in FY22E, FY23E, respectively.
Kochi utilisation to improve in FY22E
Petronet’s Kochi terminal is seeing a gradual increase in capacity utilisation post commissioning of the Kochi-Mangalore pipeline. The management said Kochi utilisation is likely to reach up to 30% in the next six months to one year. The 17.5 mmtpa Dahej terminal has been booked for 7.5 mmtpa under RasGas long term volumes while an additional 8.25 mmtpa has been booked as regasification capacity, thus providing visibility to long term volumes.
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