Petronet LNG (PLNG) reported its Q3 FY13 revenues at Rs84.2bn implying a growth of 33.1% yoy and 11.6% qoq. The revenues came in better than our estimates (+8%) on back of better volume performance and higher RLNG price. Total volumes handled in the quarter were 140tbtu, which were up 4.8% qoq but down 2.4% yoy. The sequential recovery in volumes was on back of higher long term volumes (+7% qoq) and higher short term and spot volumes (+11% qoq) in the quarter. The re-gas cargos handled were seen slightly lower at 14tbtu. Spot prices of RLNG were sequentially higher at ~US$15/mmbtu levels owing to strong winter season in the major Asian consumers (China and Korea) during the quarter.
OPM for the quarter was recorded at 6.3%, declining 59bps sequentially and 167bps yoy. The OPM was lower than our estimates owing to higher raw material costs observed in the quarter. Material costs (as % of sales) rose by 72bps qoq and 176 bps yoy. Further, lower proportion of re-gasification and spot cargos led to the sequential decline in OPM. PAT at Rs3,185mn came in line with our estimates, and grew by 7.8% yoy and 1.2% qoq.
|As a % of net sales||Q3 FY13||Q3 FY12||bps yoy||Q2 FY13||bps qoq|
- Key updates on the ongoing projects:
- Kochi: The terminal is now expected to be commissioned in Q1 FY14. While the terminal and the phase-1 pipeline is ready, the company awaits its consumer (FACT) to get its conversion facilities in place by April-May 2013 post which the Kochi terminal can be commercially commissioned. In phase-2, Kochi-Bangalore (via Tamil-Nadu) pipeline is making steady progress whereas the land issues on Kochi-Mangalore pipeline are being addressed. Management maintained the target for Phase-2 completion as December 2013.
- Dahej: EPC bidder for new re-gasification facilities has been short-listed and the scheduled target for the project is end of 2015. Meanwhile work on Dahej second jetty is ongoing and it is expected to be ready by early 2014. The second jetty would enable better loading and handle volumes beyond the current 11mtpa. On the re-gasification charges, management informed of having implemented the 5% yearly hike in charges from Q4 FY13.
- Gangavaram: All the pre project activity is on schedule and the final Investment decision on the project has been approved. The management reiterated its plan to hire a FSRU (temporary floating re-gasification unit) by end of CY14 with a capacity to handle 2-3mtpa before the land based unit comes up.
- We believe that Petronet is the best play on the current attractive dynamics in the domestic gas industry. With minimized regulatory threat and large percentage of volumes locked in long term contracts we note superior visibility in the business of the company. We remain optimistic of its business and forecast a revenue and PAT CAGR of 25.6% and 7.1% over FY12-15E respectively. Maintain BUY with a price target of Rs187.
|(Rs m)||Q3 FY13||Q3 FY12||% yoy||Q2 FY13||% qoq|
|Regas services (TBTUs)||14.0||21.8||(35.7)||17.3||(19.3)|
|OPM (%)||6.3||7.9||(167) bps||6.9||(59) bps|
|Effective tax rate (%)||31.9||32.7||32.3|
|PAT margin (%)||3.8||4.7||(88) bps||4.2||(39) bps|
|Ann. EPS (Rs)||17.0||15.8||7.8||16.8||1.2|
|Y/e 31 Mar (Rs m)||FY12||FY13E||FY14E||FY15E|
|Revenues (Rs m)||226,959||305,486||373,749||449,909|
|yoy growth (%)||72.0||34.6||22.3||20.4|