Ruchi Agrawal Moneycontrol Research
Petronet LNG (PLNG) reported a subdued performance with a noticeable year-on-year (YoY) contraction in EBITDA and net margins despite a strong YoY uptick in revenue and a slight surge in profits.
-The quarter saw a strong 30 percent YoY revenue growth but the topline contracted 6 percent sequentially.
-EBITDA remained largely flat on a YoY basis; however, there was a noticeable 4 percent dip quarter-on-quarter (QoQ).
-While EBITDA margins slightly improved sequentially, there was a 252 basis point YoY contraction on the back of higher raw material costs and a surge in employee expenses. Though the employee expenses were up YoY, there was some cooling off during the quarter after a sharp surge in Q2FY19.
-The company was able to bring in a substantial 41 percent cut in the finance costs which is a healthy sign. Other expenses were down almost 7 percent YoY.
-Other income more than doubled on a YoY basis. However, it was down 20 percent sequentially.
-While the company’s performance has been impacted due to varied reasons we see several catalysts like brownfield expansion in Dahej, commissioning of the Kochi pipeline, international expansion, and progress on the uniform pipeline tariffs which we believe would help to improve the performance in the coming terms.
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