Sharekhan's research report on Petronet LNG
Q2FY22 adjusted PAT of Rs. 818 crore, up 9% q-o-q was 25% above our estimate led by benefit of trading margin (Rs. 276 crore), inventory gain (Rs. 118 crore) which offsets forex loss (Rs. 98 crore), 8% miss in re-gas volume and lower other income. Dahej/Kochi re-gas volume declined by 7%/16.7% q-o-q to 182 tbtu/10 tbtu due to high spot LNG price. Dahej re-gas volume decline is attributed to lower tolling volume at 77 tbtu versus 94 tbtu in Q1FY23. Spot LNG declined to $24/mmbtu and a further decline is expected in Q4FY23, which remains key to recovery in Dahej/Kochi terminal utilisatiion level. Board approved capex of Rs 2,305 crore for FSRU Gopalpur terminal; the Dahej expansion on track to get completed over CY24-25.
Outlook
We maintain our Buy rating on Petronet LNG with an unchanged PT of Rs248 as valuation of 8.8x/7.6x its FY24E/FY25E EPS is attractive given resilient earnings model despite volatile LNG price and stock offers ~5-6% dividend yield.
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