Petronet LNG reported its Q4FY20 results that were below our estimates on the profitability front due to high forex loss and lower margins owing to inventory loss. Volumes fell 6% QoQ to 219 tbtu (I-direct estimate: 211.5 tbtu) due to lower demand in March. Revenues were down 3.9% QoQ to Rs. 8567.2 crore (I-direct estimate: Rs. 7921.7 crore). Blended margins were at Rs. 51.7/mmbtu, below estimate of Rs. 54/mmbtu. EBITDA fell 37% QoQ to Rs. 697.5 crore vs. our estimate of Rs. 978.2 crore, impacted by forex loss of Rs. 178 crore. Consequently, PAT was at Rs. 359 crore (I-direct estimate: Rs. 577.4 crore).
Valuation & Outlook
Petronet LNG provides comfort on the business model and remains a structural story of India's increasing gas demand. With India continuing to be short of natural gas supply, Petronet LNG will benefit as the primary play on increasing usage of LNG. The company is planning to set up 300 LNG stations in the next four to five years along major highways in partnership with OMCs & CGDs to push usage of LNG as a transport fuel. On the new project front, the management indicated the company is planning to set up an import terminal on the east coast. Also, Petronet's deal with Tellurian to buy stake and import LNG is under negotiation. We maintain BUY recommendation on the stock. We value Petronet LNG at 15x FY22E EPS of Rs. 19.6 to arrive at a target price of Rs. 295.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_PetronetLNG_Q4FY20.pdf
Shares of PETRONET LNG LTD. was last trading in BSE at Rs.257.65 as compared to the previous close of Rs. 258.1. The total number of shares traded during the day was 146681 in over 3034 trades.
The stock hit an intraday high of Rs. 260.8 and intraday low of 252.5. The net turnover during the day was Rs. 37686644.