Emkay Global Financial recommended hold rating on Petronet LNG with a target price of Rs 290 in its research report dated June 30, 2020.
Emkay Global Financial's report on Petronet LNG
Petronet LNG (PLNG) reported standalone EBITDA/PAT of Rs6.98/3.59bn in Q4FY20, down 13%/18% yoy, 37%/47% qoq and 35%/46% below estimates due to IndAS 116-led forex loss of Rs1.78bn on shipping and lower regas income/spot LNG marketing earnings. Dahej terminal operated at 93% capacity during Q4 (vs. our 95% est), with tolling/long term volumes in line at 105/95tbtu, though spot was 6tbtu (est. 10tbtu). Kochi utilization was better at 21% (est. 18%). Total volumes declined 6% qoq to 219tbtu (up 7% yoy). Other Expenditure included Rs1bn of PM Cares Fund contribution. Implied marketing margin on spot LNG was in line at USD0.5/mmbtu. EBITDA/mmbtu fell 19% yoy/33% qoq to Rs31.9. The negative impact of IndAS 116 on PBT was Rs2.38bn in Q4.
We cut our FY21/22E EPS by 16%/11%, building in lower volumes due to Q1 hit and higher competition. We cut our DCF-based TP by 5% to Rs290. We maintain Hold and UW stance in EAP. The Tellurian deal is a key continuing overhang on the stock.
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