Petronet LNG Q4 Results Review - Inventory Loss, Provisions Impacted Earnings, Robust Volume: Dolat Capital

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Dolat Capital Report.Petronet LNG Ltd.'s Q4 FY24 results were below our estimated gross profit/Ebitda/profit after tax by -15%/-18%/-20% mainly due to-provisions of Rs 0.37 billion for nonrecovery of ‘Use or Pay’ payments; and inventory loss of Rs 1.07 billion, on account of fall in LNG prices in Q4FY24. Petronet LNG increased its provisions to Rs 3.6 billion till FY24 end (till end of 9M FY24 Rs 3.2 billion + Q4 FY24 additional provision of Rs 0.4 billion). Its total ‘Use or Pay’ payments/receivable towards offtakes for underutilization of Dahej terminal stands at Rs 14.7 billion (net of provisions), which is a challenge to recover. Although management has received bank guarantees worth Rs 12.2 billion (CY21+CY22). Dahej expansion is expected to complete by end of FY25E with no capacity bookings for incremental 5 metric million tonnes per annum. The company is also planning to invest in 2 mega capex projects (petrochemical plus Gopalpur LNG terminal), which will lead to aggressive capex spends FY25 onwards. We build in incremental Rs 40 billion/annum capex from FY25E that implies negative free cash flow and pressure on dividend payouts. We have largely maintained our earnings estimates and tweaked the DCF based target price to Rs 240/share (earlier Rs 227). Rise in target price is due to lower risk-free rate assumption. Maintain ‘Sell’ rating on the stock..Click on the attachment to read the full report:.Petronet LNG Q4 Results: Net Profit Up 20% To Rs 738 Crore.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Petronet LNG Q4 Results Review - Inventory Loss, Provisions Impacted Earnings, Robust Volume: Dolat Capital

Robust volume growth in Q4; risk in long run from new terminals

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Petronet LNG Q4 Results Review - Inventory Loss, Provisions Impacted Earnings, Robust Volume: Dolat Capital

Robust volume growth in Q4; risk in long run from new terminals

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