Petronet LNG: Results good, but cues on new terminal will decide the course
India’s biggest LNG player posted a 7.8% improvement in net profit to Rs 318.5 crore, while the turnover increased 33.1% during October – December 2012.
By Ramkrishna Kashelkar, ET Bureau | Updated:
MUMBAI: Petronet LNG has come out with results for the December ’12 quarter that are slightly better than market expectations. The scrip’s future trend will depend more on progress on its Kochi terminal and overall LNG prices. The company’s management holds a conference call for analysts today (Monday).
India’s biggest LNG player posted a 7.8% improvement in net profit to Rs 318.5 crore, while the turnover increased 33.1% during October – December 2012. The company posted a sharp fall in its operating profit margins by 130 basis points to 6.3% against the year ago period.
Petronet LNG’s stock price has languished in 2012 despite earnings scaling new highs as investors were concerned about a slow ramp-up at Kochi terminal and regulatory interventions on its margins. Although the concerns over regulatory interventions subsided the slow ramp-up at the 5 MTPA Kochi terminal remains a cause of concern.
"The slower ramp-up at Kochi does not appear to be baked into FY14 consensus earnings estimates, which we still find c20% too high," mentioned a report by Barclays dated 3rd January. "Lower trading margins at Dahej may also hurt with Petronet’s 1.6mtpa medium-term import contracts getting re-priced in 2013," it added before maintaining a 'Equal Weight' or neutral stance on the company.
Investors will aim to gain more knowledge on the status of Kochi LNG import terminal and company’s expectations about its ramp-up, besides the current spot LNG price trends to decide the fate of the scrip.
India’s biggest LNG player posted a 7.8% improvement in net profit to Rs 318.5 crore, while the turnover increased 33.1% during October – December 2012. The company posted a sharp fall in its operating profit margins by 130 basis points to 6.3% against the year ago period.
Petronet LNG’s stock price has languished in 2012 despite earnings scaling new highs as investors were concerned about a slow ramp-up at Kochi terminal and regulatory interventions on its margins. Although the concerns over regulatory interventions subsided the slow ramp-up at the 5 MTPA Kochi terminal remains a cause of concern.
"The slower ramp-up at Kochi does not appear to be baked into FY14 consensus earnings estimates, which we still find c20% too high," mentioned a report by Barclays dated 3rd January. "Lower trading margins at Dahej may also hurt with Petronet’s 1.6mtpa medium-term import contracts getting re-priced in 2013," it added before maintaining a 'Equal Weight' or neutral stance on the company.
Investors will aim to gain more knowledge on the status of Kochi LNG import terminal and company’s expectations about its ramp-up, besides the current spot LNG price trends to decide the fate of the scrip.
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