It was well known that one of the key beneficiaries of the domestic shortage of gas would be liquefied natural gas (LNG) importer Petronet LNG Ltd.
The company hasn’t disappointed, reporting a spectacular set of financial results for the quarter ended June. In reaction to the numbers, the Petronet LNG stock rose by 3.3% on Wednesday to Rs153, even as the benchmark Sensex fell by 0.8%.
While the company had reported strong numbers in the March quarter as well, the June quarter results are even better.
Revenue increased by 83% in the June quarter year-on-year (y-o-y) compared with 67% y-o-y growth in the March quarter. On a sequential basis, revenue increased by 16% to Rs4,623 crore.
Growth in revenue can be mainly attributed to higher volumes. The company’s total re-gasified volume increased by 40% compared with the same period last year to 133.37 trillion British thermal units.
Petronet LNG operated at 105% of its capacity during the quarter. Its current capacity is about 10 million tonnes per annum.
While operating profit margins have slipped by 33 basis points on a y-o-y basis to 9.48%, they have improved by 66 basis points compared with the March quarter. One basis point is one-hundredth of a percentage point. Operating margin on a y-o-y basis was affected primarily on account of higher input costs.
Petronet LNG’s net profit increased by a huge 130% y-o-y, more than the 112% y-o-y growth reported in the March quarter. Sequentially, net profit is up by 24% to Rs.256 crore, far ahead of the Street estimates.
The company attributes the strong profitability to additional volumes, better margins on short-term contracts and spot cargoes sourced by it, along with increased efficiency in operations.
In the last one year, investors of Petronet LNG would have rejoiced, as the stock has sharply outperformed the BSE-200 Index and delivered good returns. Analysts are likely to upgrade their earnings estimates after the stunning June quarter performance.
Though the stock has appreciated by around 80% in the last one year, the current shortage of gas in the country is likely to keep it in demand with investors for some more time.
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