Capacity expansion is expected to keep the company on a strong wicket in the next few quarters.
Petronet LNG posted top-line growth of 61.62 per cent year-on-year to Rs 3,267.64 crore in the December quarter, aided by higher fixed volumes.
The throughput stood at 120tbtu (38mmscmd) compared to 100tbtu (32mmscmd) in the second quarter and 95tbtu (1.92mmt/29.6mmscmd) in the corresponding period of the previous year, according to a Motilal Oswal report. Realisation increased 23.1 per cent, boosted by higher spot gas prices and increased RasGAs LNG.
Net re-gasification margins increased to Rs 32.5/mmbtu (30.1 per cent) from Rs 25/mmbtu a year ago due to higher spot volume margins. This helped earnings before depreciation, interest, tax and amortisation grow 65.56 per cent to Rs 345.61 crore, the best growth in the last five quarters. Thus, its net profit, at Rs 170.84 crore, doubled as compared to the corresponding period of the previous year.
Petronet has signed a new 1.1 mmtpa contract for sourcing LNG in FY12 and FY13. Off-take arrangements have also been made. Thus, concerns over capacity utilisation beyond fixed contracts have been addressed. Analysts at Prabhudas Liladher say Gail’s contract with Japan’s Marubeni to source 0.5 mmtpa LNG for three years starting January 2011 adds to the possibility of the optimum use of the Petronet terminal.
The 2.5 mmtpa Kochi terminal is expected to be commissioned by the third quarter of the next financial year and will be expanded to five mmtpa in another six months. The other growth driver, analysts say, will be 25-30 per cent capacity augmentation of its 10-mmtpa Dahej terminal, expected by the first quarter of FY14.
With strong third quarter results, most analysts have increased their earnings per share estimates. Valuing the stock on a discounted cash flow method, analysts at Motilal Oswal have arrived at a fair value of Rs 140 for the stock. It ended 2.2 per cent lower on Thursday at Rs 129.25 over its previous close and trades at 11.5x FY13E earning per share of Rs 11.3, according to analyst estimates.
