Petronet LNG - ACCUMULATE - TP Rs.285 - Result Update - Kotak- PLNG's Q2FY18 result is better than our expectation. The company has reported a PAT of Rs.5.9 bn up by 28.1% yoy and 35% qoq, resulting in a quarterly EPS of Rs.3.93 and CEPS of Rs.4.6. In Q2FY18, PLNG has booked highest total volume throughput of 220 TBTUs, 15% qoq and 17% yoy.
- Dahej RLNG terminal operated at 110% capacity utilization (expanded capacity of 15 mmtpa) in Q2FY18. Kochi RLNG terminal operated higher at 15.4% capacity utilization in Q2FY18 vs 11.6% capacity utilization in Q1FY18.
- Expansion Plans: The company in order to expand business in India is planning to acquire at least 26% stake in Indian Oil Corp.'s Ennore LNG 5 MMTPA terminal in south India expected to commission in 2018-19. IOC is scouting for a strategic investor for Ennore terminal. Further, the company is expanding its footprints in global market by setting up a 7.5 MMTPA LNG terminal in Bangladesh.
- The company has plans to venture into retail LNG business and in this regard it will test run LNG-fueled buses in Gujarat and Kerala.
- We expect LNG consumption to rise in India. Additionally, there is a strong possibility of ban on furnace oil and petroleum coke in NCR, resulting in incremental demand on LNG.
- We expect PLNG to report an EPS of Rs.14.1 for FY18E and an EPS of Rs.15 for FY19E. We expect FY18E to be better driven by acceleration in volume growth, supported by expansion. At CMP, we believe that the stock is reasonably valued at 177x FY19E earnings. We maintain accumulate rating on the stock with a revised price target of Rs.285/- (earlier Rs.240) including equity value of 26% stake in Dahej Port
Shares of PETRONET LNG LTD. was last trading in BSE at Rs.250.75 as compared to the previous close of Rs. 258. The total number of shares traded during the day was 213149 in over 3607 trades.
The stock hit an intraday high of Rs. 261.7 and intraday low of 249. The net turnover during the day was Rs. 54322614.