PETRONET LNG LTD – Q2 FY18

Petronet LNG Ltd reported it’s highest ever quarterly PAT for the September quarter FY18. Revenue, PAT & EBDITA rose strongly by 17%, 28% & 22% respectively in the current September quarter. Net Profit or PAT for the September quarter stood at Rs.5888 Mn compared to Rs. 4596 Mn same period previous year with sequential growth of 35%. Petronet reported EBDITA at Rs. 10007 Mn with 22% yearly and 23% growth on quarterly basis in Q2 FY18, maintaining its operational efficiency. Revenue or Income from operations also grew 17% YOY at Rs.77702 Mn compared to Rs. 66144 Mn in Q2 FY17 with phenomenal sequential growth of 21%.  Operational expenditure was reported at Rs. 68715 Mn in the current quarter against Rs. 58880 Mn same period previous year, rising 17% YOY. Though interest cost was constant sequentially and declined 16% YOY at Rs.465 Mn, depreciation expenditure jumped by 21% YOY from Rs. 860 Mn to Rs. 1039 Mn in the current quarter.

Other Income jumped 1.4 times QOQ and 11% yearly at Rs. 1019 Mn in the current September quarter. Strong operational performance led to healthy EBDITA Margin improving 51 basis points YOY and stood at 12.88% against 12.37% same period previous year. Net Profit Margins stood at 7.58% compared to 6.95% in the corresponding quarter previous year. One basis point is one hundredth of one percentage point. The Company has reported its highest ever profit before tax of Rs 8504 Mn witnessing a growth of 26% over the corresponding quarter previous year reported at Rs. 6765 Mn and a growth of 28% over the previous quarter Q1 FY 2018 at Rs 6657 Mn. Higher PBT & PAT growth is due to higher volumes processed because of the increase in the Regasification capacity, post expansion of the Dahej Terminal and better efficiency achieved in the operations. During the quarter ended 30th September, 2017,  Petronet processed highest ever combined throughput at 220 TBTU. Dahej terminal processed 210 TBTU of LNG and operated at around 110% of its name plate capacity. Dahej Terminal meets 38% of the country’s gas requirement and around 80% of LNG imports of the country. Though the recent jump in energy prices is a systematic risk for the company, Petronet LNG Limited is expected to perform well with growing energy needs of the country. We recommend BUY for the stock for medium & long term with a target price of Rs 358.

Disclaimer                                       

                                      

The information and opinions contained in the research reports have been compiled or arrived at from sources believed reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. The research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including but not limited to tax advice. The reports do not take into account the particular investment objectives, financial situations, risk profile or needs of individual clients. The user assumes the entire risk of any use made of this information. This report is not to be relied upon in substitution for the exercise of independent judgment.

The price and value of investments referred to in this research and the income from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur.

Research data and reports published/ emailed/ text messaged via Short Messaging Services, Online Messengers, WhatsApp etc/transmitted through mobile application/s, including but not limited to FLIP™, Video Widget, telephony networks, print or electronic media and or those made available/uploaded on social networking sites (e.g. Facebook, Twitter, LinkedIn etc) is for informational purposes only. The reports are provided for assistance and are not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this information. Though disseminated to clients simultaneously, not all clients may receive the reports at the same time. We will not treat recipients as clients by virtue of their receiving this report.

The reports include projections, forecasts and other predictive statements which represent our assumptions and expectations in the light of currently available information. These projections and forecasts are based on industry trends, circumstances and factors which involve risks, variables and uncertainties. The actual performance of the companies represented in the report may vary from those projected.

The opinions expressed in the reports are subject to change but we have no obligation to tell our clients when our opinions or recommendations change. The reports are non-inclusive and do not consider all the information that the recipients may consider material to investments.

We shall not be in any way responsible for any indirect, special or consequential damages that may arise to any person from any inadvertent error in the information contained in the reports nor do they take guarantee or assume liability for any omissions of the information contained therein. Information contained therein cannot be the basis for any claim, demand or cause of action. These data, reports and information do not constitute scientific publication and do not carry any evidentiary value whatsoever.

The user should consult their own advisors to determine the merits and risks of investment and also read the Risk Disclosure Documents for Capital Markets and Derivative Segments as prescribed by Securities and Exchange Board of India before investing in the Indian Markets. The securities discussed in this report may not be suitable for all investors. Investors must make their own investment decision based on their own investment objectives, goals and financial position and based on their own analysis. Prospective investors and others are cautioned that any forward-looking statements, if any, are not predictions and may be subject to change without notice.

This report may provide the addresses of, or contain hyperlinks to websites. Except to the extent to which the report refers to material we take no responsibility whatsoever for the contents therein. Such addresses or hyperlinks are provided solely for your convenience and information and the content of the linked site does not in any way form part of this report. Accessing such website or following such link through this report shall be at your own risk.

The author of this Research Report accepts no liability and will not in any way be responsible for the contents of this report or for any losses, costs, expenses, charges, including notional losses/lost opportunities incurred by a recipient as a result of acting or non-acting on any information/material contained in the report. This is not an offer to sell or a solicitation to buy any securities or an attempt to influence the opinion or behavior of investors or recipients or provide any investment/tax advice. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction.

Name Of Research Analyst	Financial Exposure/Interest	Ownership
Suhani Adilabadkar	Nil	Nil
Relative	Owns Shares In the Company	Less than 1%