Prabhudas Lilladher's research report on Petronet LNG
Petronet LNG (PLNG) missed Q4 estimates given EBIDTA/PAT of Rs9.4bn (- 43%Q/Q; PLe Rs10.9bn) and Rs6.1bn (-48%Q/Q, PLe Rs7.3bn), due to lower than expected margins and volumes. However recent softening of spot LNG prices to USD10-11/mmbtu from recent high of over USD30/mmbtu augurs well, as spot volumes for FY23 were muted at 9tbtu vs 18tbtu in FY22. Additionally, company’s long-term contract is best suited in today’s uncertain global economy. We believe PLNG is a formidable play on India’s rising LNG imports, despite rising domestic gas production backed by 1) high earnings visibility from long term contracts and 2) limited competition to its well-entrenched reach in LNG business.
Outlook
We leave our estimates largely unchanged except for BS updation. Reiterate ‘BUY’ with a DCF based PT of Rs322 (Rs326).
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