Petronet LNG Q2 PAT seen down 7.2% at Rs 238 cr

Petronet LNG is likely to report a fall of 7.2% QoQ in profit after tax of Rs 238 crore in the quarter ended September 2011. The company had posted profit of Rs 256.7 crore in previous quarter. 

Sales are seen going up by 9% to Rs 5,040 crore from Rs 4,623.3 crore quarter-on-quarter.

EBITDA is expected to go down 3.7% to Rs 422 crore from Rs 438.1 crore during the same period. Operating profit margin is likely to be at 8.3% as against 9.5%.

Factors to watch

* Spot LNG prices have firmed up quite significantly after the Japan quake (At USD 15-16/mbtu in Q2 versus 12-13 in Q1; Delivered price over USD 18/mbtu, above oil parity)

* Street divergent on its volume expectations for Petronet in Q2

* Some expect spot cargo volumes to moderate as demand takes a hit (at high prices)

* Others believe demand remains robust despite high prices and expect a QoQ improvement

* Marketing margin definitely expected to correct from high levels of Q1

(So Q2 is a test of whether high spot LNG prices do dent demand or whether consumers continue to buy despite the high price due to the domestic gas supply shortage)