IGI Logo

PLNG reported Q1FY26 standalone adjusted EBITDA/APAT of Rs13.0/9.5bn – beating our estimates by 10%/12%, owing to better-than-expected volume. Dahej utilization in Q1 improved QoQ to 93% (6% beat), while Kochi was weaker at 21%, albeit higher than our estimate by 2%. There were no spot volumes at either terminal in Q1FY26. Dahej capacity expansion is slightly delayed due to the monsoons and geopolitical turmoil, and is now expected by CY25-end; on the other hand, petchem and jetty projects are advancing as scheduled. The Board has given in-principle approval for a 5mmtpa land-based terminal in Gopalpur, with Rs63.5bn capex and an estimated construction timeline of over three years. The management remains upbeat about India’s gas outlook, and significant liquefaction capacities globally would lead to attractive spot pricing in the medium term. We cut FY26E/27E EPS by 4%/3% on lower volume assumptions. We retain BUY with unchanged TP of Rs390.

Result highlights Service volume at Dahej rose 15% QoQ to 102tbtu, while the long-term volume rose 6% QoQ to 105tbtu. Total volume was down 16% YoY/up 7% QoQ to 220tbtu (at an 8% beat). Inventory gain was Rs420mn, while Regas service income was Rs6.4bn. Employee cost was up 10% YoY/36% QoQ, to Rs635mn, while other expenditure declined 3%/17% to Rs1.31bn (25% below estimate). EBITDA/mmbtu was down 12% YoY/5% QoQ as there were no trading margins. Other income rose 11% YoY to Rs2.4bn (6% beat). Share of profit from JVs was Rs174mn vs Rs47mn YoY. UoP provision of Rs1.4bn was made in Q1FY26, with total time-based provision at Rs6.1bn, as of Q1FY26-end. Total outstanding UoP receivables stood at Rs14.22bn (Rs6.9/6.1/11.7bn pertaining to CY22/23/24).

Management KTAs Domestic gas demand is expected to grow 6-7%, with LNG consumption potentially doubling by CY30. Around 180mmtpa of global LNG capacity is scheduled to come online in the next 3-4 years and could ease prices. Demand remains strong with firm throughput and long-term LNG prices remain affordable, supporting volume growth. The Kochi– Bengaluru pipeline should be ready by FY26-end. Offtaker discussions are ongoing for Gopalpur, though the company would proceed with the project simultaneously, targeting 20% initial utilization, gradually ramping it up to 80-90%. It is located ~35km from GAIL’s Srikakulam–Angul trunk pipeline. Dahej expansion completion target is now CY25- end, with stable capacity from Q1CY26. The Gorgon Phase II 15-year contract (1.2mmtpa) is expected to commence by FY26-end, starting with 0.5mmtpa for two years before full ramp-up. PLNG strategically aims for Rs1trn turnover and Rs100bn PAT, with Rs400bn capex over five years. While ambitious, it targets at least 50-60% revenue growth (vs current run rate) and Rs300bn of capex. FY26 capex is pegged at Rs50bn

Valuation We value PLNG using DCF analysis. Our TP implies ~13.5x Mar-27E target P/E. Key risks: adverse petroleum/gas prices, competition, project delays, capital misallocation.

For More  Emkay Global Financial Services Ltd Disclaimer http://www.emkayglobal.com/Uploads/disclaimer.pdf & SEBI Registration number is INH000000354