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Petronet LNG
Performance Highlights
Quarterly highlights (Standalone)
Particulars (` cr) Net Sales EBITDA % margin Net Profit 2QFY13 2QFY12 % chg (yoy) 1QFY13 % chg (qoq)
ACCUMULATE
CMP Target Price
Investment Period
5,367 448 8.4 260 40.7 15.6 (149)bp 20.9 7,030 527 7.5 271 7.4 (1.6) (63)bp 16.2
Stock Info Sector Market Cap (` cr) Beta Net debt (` cr) 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others Abs. (%) Sensex PLNG 3m 8.1 14.6 1yr 10.3 2.8 50.0 7.9 24.2 17.9 3yr 8.5 125.8 Oil & Gas 12,660 0.7 5,300 180/122 214,349 10 18,682 5,684 PLNG.BO PLNG@IN
`169 `183
12 Months
For 2QFY2013, Petronet LNG (PLNG) reported a strong growth in its net profit on account of high marketing margin on its short-term contracts. We recommend Accumulate rating on the stock. RLNG volumes flat yoy: During 2QFY2013, PLNGs R-LNG volumes were flat at 135TBTU. The contractual volumes stood at 90TBTUs, while spot cargo and tolling volumes stood at 45TBTUs. The average realization improved by 39.7% yoy to `555/mmbtu. Therefore, net sales increased by 40.7% yoy to `7,549cr.
FY2011 13,197 23.9 620 53.2 8.3 9.2 20.5 4.7 25.2 18.6 1.1 11.8
FY2012 22,696 72.0 1,058 70.7 14.1 8.1 12.0 3.6 34.1 25.4 0.6 8.0
FY2013E 30,077 32.5 1,135 7.3 15.1 6.6 11.2 2.8 28.4 23.9 0.5 6.9
FY2014E 33,570 11.6 1,145 1.0 15.3 6.3 11.1 2.3 23.1 21.7 0.4 6.0
Bhavesh Chauhan
Tel: 022- 39357600 Ext: 6821 Bhaveshu.chauhan@angelbroking.com
Vinay Rachh
Tel: 022- 39357600 Ext: 6841 vinay.rachh@angelbroking.com
2QFY13 7,549 7,065 93.6 80 1.1 7,144 94.6 518 6.9 32 47 25 465 6.2 150 32.3 315 4.2
2QFY12 5,367 4,814 89.7 52 1.0 4,866 90.7 448 8.4 46 46 20 376 7.0 116 30.8 260 4.9
yoy % 40.7 46.8 52.9 46.8 15.6 (30.9) 0.9 23.1 23.5 29.3 20.9
1QFY13 7,030 6,433 91.5 71 1.0 6,504 92.5 527 7.5 33 46 27 405 5.8 134 33.1 271 3.9
qoq % 7.4 9.8 12.5 9.9 (1.6) (3.9) 1.7 (6.9) 14.8 11.9 16.2
1HFY13 14,579 13,497 92.6 150 1.0 13,648 93.6 1,045 7.2 65 93 51 870 6.0 284 32.7 586 4.0
1HFY12 9,990 8,947 89.6 104 1.0 9,051 90.6 939 9.4 92 92 43 749 7.5 232 30.9 517 5.2
yoy % 45.9 50.9 44.4 50.8 11.3 (30.0) 0.7 18.9 16.2 22.7 13.3
RLNG volumes flat yoy: During 2QFY2013, PLNGs R-LNG volumes were flat at 135TBTU. The contractual volumes stood at 90TBTUs, while spot cargo and tolling volumes stood at 45TBTUs. The average realization improved by 39.7% yoy to `555/mmbtu. Therefore, net sales increased by 40.7% yoy to `7,549cr.
(tbtu)
42
40 20 0 6 10
20
27
36
45
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
(%)
60
46
(` cr)
3,628
(` cr)
(` cr)
(%)
150 100 50 -
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12
1QFY13
2QFY13
EBITDA (LHS)
2QFY13
(%)
200
3.0
Investment arguments
Capacity additions to drive volume growth: PLNG plans to double its capacity at the Kochi terminal to 5mn tonne by FY2013, while its second jetty at Dahej terminal is expected to be commissioned by 4QFY2014. LNG import model viable going ahead: We believe LNG is likely to be a key source of gas supplies in the medium term on account of strong gas demand in the country. Hence, PLNG is a proxy play on the increasing gap between natural gas supplies and demand in the country. The decline in production from KG D6 basin has further helped the matters. Moreover, the government is making efforts to maintain long-term viability of LNG in the overall gas mix of the country.
consensus (%)
14.1 14.7
297
Neutral Accum.
3,934 12,660
15.5 11.2
13.4 11.1
4.1 2.8
3.7 2.3
8.3 6.9
8.8 6.0
28.7 28.4
29.0 23.1
29.5 23.9
25.9 21.7
169 183
Company Background:
PLNG was formed in 1998 by the Government of India as a joint venture between oil and gas PSUs namely HPCL, IOCL, GAIL and ONGC who own 12.5% equity stake each in the company. It was formed to facilitate import of LNG in India. It started its operations in 2004 and the company currently has a regasification and LNG import terminal at Dahej in Gujarat with 10.0mn tonne p.a. capacity while a second one in Kochi with 5.0mn tonne p.a. capacity is under construction and will be ready by end of FY2013.
150 100 50 0
Feb-08 Sep-07 Oct-09 Nov-06 May-09 Nov-11 Dec-08 Aug-10 Mar-10 Sep-12 Jun-06 Jan-06 Apr-07 Jan-11 Jun-11 Apr-12 Jul-08
5x
8x
11x
14x
17x
Key Ratios
Y/E March Valuation Ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV/Total Assets Per Share Data (Rs) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book Value Dupont Analysis (%) EBIT margin Tax retention ratio Asset turnover (x) ROIC (Post-tax) Cost of Debt (Post Tax) Leverage (x) Operating ROE Returns (%) ROCE (Pre-tax) Angel ROIC (Pre-tax) ROE Turnover ratios (x) Asset Turnover (Gross Block) Inventory / Sales (days) Receivables (days) Payables (days) WC cycle (ex-cash) (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest Coverage (EBIT/Int.) 0.7 1.5 7.9 0.7 1.9 3.7 0.6 1.4 5.3 0.5 1.0 9.3 0.2 0.5 9.8 0.0 0.1 7.8 4 10 22 28 4 4 10 20 28 4 4 7 19 20 (3) 6 8 17 16 (7) 6 10 18 24 (5) 5 11 20 30 (4) 20.0 49.5 28.8 14.3 29.9 19.2 18.6 37.2 25.2 25.4 46.6 34.1 23.9 51.6 28.4 21.7 37.3 23.1 9.5 67.1 2.7 17.5 3.5 0.8 28.8 6.4 67.5 2.7 11.9 5.2 0.8 17.2 7.8 68.4 3.0 15.9 4.8 0.7 23.9 7.2 68.1 4.3 21.2 4.0 0.3 27.1 5.9 67.0 5.1 20.2 4.0 0.1 22.3 5.5 67.0 11.4 42.1 4.9 0.0 42.8 6.9 6.9 8.3 1.8 26.4 5.4 5.4 7.5 1.8 29.8 8.3 8.3 10.7 1.8 35.7 14.1 14.1 16.6 1.9 46.9 15.1 15.1 18.0 2.0 59.7 15.3 15.3 19.1 2.1 72.5 24.4 20.4 6.4 1.0 1.7 15.5 3.1 31.3 22.4 5.7 1.0 1.3 16.9 2.8 20.5 15.8 4.7 1.1 1.1 11.8 2.4 12.0 10.2 3.6 1.1 0.6 8.0 2.1 11.2 9.4 2.8 1.2 0.5 6.9 1.7 11.1 8.8 2.3 1.3 0.4 6.0 1.4 FY2009FY2010 FY2011 FY2012 FY2013E FY2014E
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Website: www.angelbroking.com
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Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered
Petronet LNG No No No No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors
Ratings (Returns):
10