Petronet LNG posts its highest ever quarterly PAT in Q2FY18; Buy | Petronet LNG Q2FY18 | Fundamental analysis | Outlook |

Petronet LNG Ltd reported it’s highest ever quarterly PAT for the September quarter FY18. Revenue, PAT & EBDITA rose strongly YOY 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, rising 63 basis points YOY. 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 and the remaining 10 TBTU was processed by Kochi Terminal. 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 investment with PE multiple of 18.00 x FY18E & 16.03 x FY19E with a target price of Rs. 340.
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About Suhani Adilabadkar

Suhani Adilabadkar is a Research Analyst registered with SEBI ((INH200003240)) She has done PGDBA (Finance), MS (Finance) and a Fellowship from Insurance Institute of India. She maintains a blog where she publishes research reports across industries –

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