LKP has maintained a 'Neutral' rating on Petronet LNG with a target price of Rs 178, in its August 5, 2014 research report.
"PLNG's Dahej gas volumes for the quarter witnessed a sequential increase of 18.7% to 138tbtu (yoy +6.6%) as the second jetty was commissioned in April 2014. Out of 138.01tbtu, 96.38tbtu was delivered on long-term basis, 16.79tbtu on spot basis while the balance 24.84tbtu was tolling volumes. Spot volumes decreased by 18.1% qoq (yoy -11.5%). On a sequential basis, tolling volumes increased by 36% (yoy 6.5x) due to higher volumes from GSPC and GAIL. Capacity utilization for the quarter stood at 96.8%. Kochi volume for the quarter stood at 0.66tbtu, of which 0.63tbtu were spot volumes. PLNG's overall volume for the quarter increased by 18.3% sequentially to 138.67tbtu (yoy +7.1%). During the quarter, PLNG was unable to earn any trading margin on spot volumes, which affected PLNG's overall performance. We estimate PLNG trading margin at –Rs42.5/mmbtu on spot volumes during the quarter as against our expectation of Rs15/mmbtu. PLNG's operating profit for the quarter stood at Rs3.6bn (yoy -10.1% qoq -7.5%) which was lower than our estimate. Operating margin for the quarter stood at 3.5% (yoy -119bps qoq -19bps) as against our estimate of 3.8%. EBTIDA/mmbtu for the quarter decreased by 16% yoy to Rs25.8 (qoq -21.8%). Lower depreciation charge due to new depreciation policy and higher other income helped abate the blow at PAT level. PLNG net profit for the quarter stood at Rs1.57bn which was lower than our estimate of Rs1.75bn. EPS for the quarter was Rs2.1."
"PLNG Q1FY15 net profit of Rs1.57bn was lower than our estimate as the company failed to earn trading margins on its spot volumes during the quarter. Regas volumes at Dahej increased by 36%/6.5x yoy/qoq to 24.8tbtu post commissioning of second jetty at Dahej. However, spot volumes witnessed a sequential decline of 18.1% to 16.8tbtu (-11.5% yoy). Implied trading margin on spot volumes decreased by from Rs19.7/mmbtu to –Rs42.5/mmbtu as against our expectation of Rs15/mmbtu. Consequently, PLNG's operating profit declined by 7.5% qoq to Rs3.6bn (yoy -10.1%) which was lower than our estimate of Rs4.1bn. However lower depreciation charge due to new depreciation policy and higher other income helped abate the blow at PAT level. PLNG net profit for the quarter stood at Rs1.57bn (lower than our estimate of Rs1.75bn). We revise our rating on the stock to NEUTRAL with a price target of Rs178. At the CMP, the stock is trading at 14.8x and 7.6x FY16e EPS and EBITDA respectively. We revise our rating on the stock to NEUTRAL with a price target of Rs178. At the CMP, the stock is trading at 14.8x and 7.6x FY16e EPS and EBITDA respectively," says LKP research report.
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