Buy Petronet LNG; target Rs 210: Motilal Oswal
Motilal Oswal is bullish on Petronet LNG (PLNG) and has recommended buy rating on the stock with a target price of Rs 210 in its January 15, 2013 research report.
January 16, 2013 / 13:25 IST
Motilal Oswal is bullish on Petronet LNG (PLNG) and has recommended buy rating on the stock with a target price of Rs 210 in its January 15, 2013 research report.
"Petronet LNG (PLNG IN) reported highest-ever quarterly PAT of INR3.2b (v/s est INR2.9b, +8% YoY/+1% QoQ) due to higher-than-expected throughput of 141 tbtu (estimated 134 tbtu) and continued high marketing margins. Implied marketing margins stood at USD0.75/mmbtu (v/s est of USD0.74/mmbtu). 3QFY13 regasified volumes were up 4% QoQ at 141tbtu (2.8mmt) v/s 135btu (2.7mmt) in 2QFY13. Higher-than-expected volumes were largely driven by higher long term contract volumes. However, despite higher QoQ LNG prices in second half of 3QFY13, third-party/spot volumes were resilient. Long term volumes stood at 97tbtu (-2% YoY, +7% QoQ); third party re-gas volumes at 14tbtu (-35% YoY, -19% QoQ) and pure short term volumes were at 30tbtu (-19% YoY, +9% QoQ).Kochi commissioning pushed to April-13, other projects on track: a) Commercial operations of Kochi terminal are expected to start by April-13 (v/s earlier guidance of March-13), once consumers are ready (conversion/ upgradation of equipment is complete) to offtake gas. b) Second jetty project at Dahej to be completed by Dec-13/Jan-14. c) Capacity expansion to 15 mmt by 2HFY16 (Dahej capacity to 18mmt) and, d) Commissioning of Gangavaram terminal by CY15-end and interim FSRU facility (through leasing) by CY14-end.We are increasing FY13E EPS by 11% to INR15.6/ sh to factor a) delayed Kochi commissioning in 1QFY14 (v/s 4QFY13 earlier) resulting in nil depreciation from Kochi in FY13 and b) adjusting for higher marketing margin at INR39/mmbtu (v/s 33 earlier).Our SOTP stands at INR210/sh - average of two valuation methodologies (1) P/E (12x FY15E EPS) and (2) DCF (INR232). While near term earnings growth is capped due to slower ramp-up at Kochi, PLNG's earnings could surprise led by higher than expected marketing margins. The stock trades at 11.9x FY14E EPS of INR13.8. Maintain Buy with a target of Rs 210," says Motilal Oswal research eport.Shares held by Central Governments/State Governments Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.To read the full report click on the attachment 
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