Motilal Oswal - Petronet Lng Limited (PETRONET) MOSL: PETRONET LNG (Buy)-Robust operating performance-outlook positive

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Motilal Oswal

Swarnendu Bhushan

MOSL: PETRONET LNG (Buy)-Robust operating performance-outlook positive

â€‹Petronet LNG: Robust operating performance; outlook positive

(PLNG IN, Mkt Cap USD6.0b, CMP INR260, TP INR312, 20% Upside, Buy)

EBITDA grew 24% YoY and 21% QoQ to INR9b, higher than our estimate of INR7.8b. The outperformance was primarily led by (a) higher utilization of Dahej and Kochi terminals, and (b) lower opex cost. PAT grew 28% YoY and 35% QoQ to INR5.9b, ahead our estimate of INR4.9b due to 11% YoY and 44% QoQ growth in other income to INR1b (our estimate: INR800m).
Dahej throughput grew 14% YoY and 14% QoQ to a new high at 210tbtu (our estimate: 199tbtu), implying 111% utilization of the 15mmt capacity. This throughput includes (in tbtu) long term: 127 (+23% YoY, +21% QoQ), third-party: 79 (+30% YoY, flat QoQ), and short term: 4 (-81% YoY, +433% QoQ; contributing to marketing margins).
Kochi throughput grew 122% YoY and 78% QoQ to 10tbtu (our estimate: 9.5tbtu), implying 15% utilization of the 5mmt capacity. This includes 7tbtu long-term (+775% QoQ) and 3tbtu pure short-term (-33% YoY, -38% QoQ).

Dahej capacity to reach 17.5mmt in 4QFY19; raising estimates

Offtake increased primarily due to coal shortage faced by power plants and seasonally non-operational Dabhol LNG terminal. Going forward, if domestic coal production increases, we could see some demand weaning off.
Management has guided for the further capacity expansion of Dahej terminal from 15mmt to 17.5mmt by 4QFY19. We have also increased Kochi regas tariff by 5% in CY18 and continue to retain flat henceforth. Adjusting our assumptions for the same results in 11% increase in FY20 estimates.

10/11/2017 10 EN

Underlying

Petronet Lng Limited

Petronet LNG develops, designs, constructs, owns and operates Liquefied Natural Gas (LNG) import and regasification terminals in India. Co. operates through the natural gas business segment. Co.'s terminals include Dahej LNG terminal, Kochi LNG terminal and Solid cargo port. Co. owns and operates a LNG regasification terminal with name plate capacity of 10 MMTPA at Dahej, in the State of Gujarat. Co. also has commissioned another LNG terminal with name plate capacity of 5 MMTPA at Kochi, in the State of Kerala. Solid Cargo Port Terminal has facilities to import/export bulk products, such as coal, steel and fertilizer.

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INE347G01014 National Stock Exchange of India India

Provider

Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Swarnendu Bhushan

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MOSL: PETRONET LNG (Buy)-Robust operating performance-outlook positive

MOSL : PETRONET LNG: Volumes dip, but outlook remains intact

For PETRONET L N G, the environment deterioration entails a downgrade to Neutral

MOSL: PETRONET LNG (Buy)-Volumes in-line; Dahej to recover

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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