February 16, 2017 / 13:16 IST
Petronet LNG (PLNG) reported robust operational performance for Q3FY17 with volumes (up 1% QoQ, 34% YoY) 5% ahead of estimates. Trading margin, however, missed with sharp trading loss (versus gains estimated), resulting in earnings miss (EBITDA 12% below estimates). Higher‐than‐expected utilisation at Dahej implies successful stabilisation of the recent 5MMT expansion.
Outlook
We expect strong growth in near‐term volumes on expanded Dahej capacity, which are largely secured through use‐or‐pay contracts. We forecast robust 20% EPS CAGR over FY16‐21 (volume CAGR: 13%). However, the stock is expensive at 2.8x FY19E P/BV with RoE of 19%, largely pricing in the upside. We maintain ‘HOLD/SP’.
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