Petronet LNG dips 5% on disappointing Q4 results; net profit falls 18% YoY

Shares of Petronet LNG (PLNG) dipped 5 per cent to Rs 224.25 on the BSE in Thursday’s intra-day trade on weak January-March quarter results. (Q4FY23).

The company reported a 19 per cent year-on-year (YoY) and 43.7 per cent quarter-on-quarter (QoQ) fall in its earnings before interest, taxes, depreciation, and amortization (EBITDA) to Rs 943 crore for the quarter.

The company’s profit after tax (PAT) declined 18 per cent YoY (down 48 per cent QoQ) to Rs 614.3 crore. Revenue increased 24.3 per cent YoY (down 12 per cent QoQ) to Rs 13,873.9 crore.

Total volume stood at 185 tbtu, down 3 per cent YoY (up 11 per cent QoQ). Sales volume came in at 124 tbtu, while regas volume was 61 tbtu. The blended margin stood at Rs 66.9/mmbtu, below expectations of Rs 71.9/mmbtu, according to ICICI Securities.

In the ongoing quarter (Q1FY24-to date), spot LNG prices have softened to $12/mmbtu. Current Dahej utilization level is at 97 per cent vs 77 per cent in Q4FY23. The management indicated that this utilization level is likely to be maintained if LNG prices continue to stay at $11-12/mmbtu. Global LNG prices and any subsequent impact on volume demand will be a key monitorable in the near term, the brokerage said in a note.

Analysts at Prabhudas Lilladher said PLNG missed Q4 estimates, due to lower than expected margins and volumes. However recent softening of spot LNG prices to $10-11/mmbtu from recent high of over $30/mmbtu augurs well, as spot volumes for FY23 were muted at 9 tbtu vs 18 tbtu in FY22. Additionally, the company’s long-term contract is best suited in today’s uncertain global economy, the brokerage said.

Analysts also believe PLNG is a formidable play on India’s rising LNG imports, despite rising domestic gas production backed by high earnings visibility from long term contracts and limited competition to its well-entrenched reach in LNG business.