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ICICI Securities Report
Petronet LNG Ltd. has reported a steady 11% YoY improvement in Ebitda to Rs 11.8 billion and a 13% YoY rise in profit after tax to Rs 7.9 billion, up 25/29% QoQ, in line with our estimates.
Dahej (in Gujarat) volumes of 217 trillion British thermal unit improved materially, rising 11/26% YoY/QoQ, respectively, while Kochi (in Kerala) volumes of 13 tbtu rose 8% YoY, flat QoQ.
Expansion plans for Dahej to enhance capacity to 22.5 mtpa by FY26E remain on track and the company is progressing on its Rs 140 billion petrochemical plant as well.
Muted valuations, sharp moderation in spot LNG prices and our sense that global LNG supplies can steadily improve over the next two-three years, lead us to believe operational prospects can be brighter over FY24E-FY25E.
However, concerns on capital allocation remain unresolved and we continue to be sceptical of the company's plan to invest Rs 140 billion-150 billion in an unrelated business line (petchem). Reiterate 'Hold'.
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