Petronet LNG Share Falls 5% After Q4 Earnings Miss Forecasts

High LNG prices dragged down Petronet LNG's Q4 and FY23 net profit.

Shares of Petronet LNG fell 4.7% to Rs 225.70 in early trade on May 4 after the LNG importer reported an 18.1% year-on-year fall in standalone profit to Rs 614.25 crore in the March quarter on weak operating data.

In a regulatory filing after the market closed on May 3, the company said standalone revenue from operations stood at Rs 13,874 crore, up 24.3% from the same period in the previous fiscal.

On the operational side, EBITDA fell 19.3% to Rs 943 crore, and the margin declined 370 basis points YoY to 6.8% as input costs remained high, up 29% YoY.

For the full year, state-owned Petronet LNG reported a 3.3% drop in profit to Rs 3,240 crore, while revenue rose 39% to Rs 59,899 crore compared to the previous fiscal.

“The board has recommended a final dividend of Rs 3 per share for FY22-23,” the company said.

Petronet LNG shares hit a 52-week high of Rs 242.25 on May 3 amid expectations for positive results. The stock is up more than 5.5% this year.

In a post-earnings report, global brokerage Jefferies said the company’s EBITDA and PAT missed expectations for lower trading earnings.

However, utilisation at its Dahej terminal improved to 97% due to lower gas prices in April and should benefit from delays in GAIL’s Dabhol terminal project.

“No major new capex has been announced except Rs 600 crore for a tank in Kochi. The company is moving ahead with the PDHPP (petrochemical) plant, and the licensor has not yet been finalised,” it said. It also adds that capex for the project will be as high as around Rs 14,000 crore and leave the balance sheet heavily indebted.

However, it has a “buy” rating on the stock with a price target of Rs 305, implying a potential upside of close to 35%.

However, HDFC Securities has a “reduce” rating on the stock, citing the adverse impact of high spot LNG prices and rising domestic gas production on medium-term spot LNG demand, among others.

Get Daily Prediction & Stocks Tips On Your Mobile