Petronet LNG (PLL) has posted disappointing numbers in Q1FY09 with net sales increasing just 6.1% year-on-year (y-o-y) to Rs16.5 billion, owing to lower sale volumes following a plant shutdown and pipeline capacity constraints.
The company purchased a greater quantum of LNG at spot rates, causing the EBITDA margin to decline by 156bps. Consequently, net profit dipped 2.2% y-o-y to Rs 1.1 billion in Q1FY09.
The company expects its Dahej terminal to commence operations with an increased capacity of 10mmtpa from January 2009 (expandable to 12.5mtpa), which is expected to drive revenues going forward.
Further, it is in talks with Exxon Mobil for 3.5mtpa of LNG for its Kochi plant.
We have revised our estimates downwards based on the quarter’s under-performance. Our EPS estimates for FY09 and FY10 stand at Rs6.4 and Rs9.3 respectively. Accordingly, we have reduced our target price to Rs86 from Rs94.