2025-05-20-Jefferies-Petronet液化天然气有限公司（PLNG）_2025财年第四季度回顾运营表现疲软；指引低迷_14页_783kb

Analyst Summary:

• Rating: UNDERPERFORM
• Price Target (PT): INR 320.75 (down from 340, reflecting muted earnings growth due to delayed Dahej expansion, competition from GAIL's Dabhol terminal, and capex spending). Current market cap stands at INR 481.1B.
• Key Points: Diminished guidance for ~5-6% volume growth in FY26 due to weak utilization of new capacity. Dahej volumes fell 14% year-over-year (YoY) and missed estimated earnings (EPS). However, Adjusted EBITDA and PAT beat estimates partly due to a large provision reversal from UoP revenues. Net cash improved but future spending on the PDH-PP project could strain the balance sheet and earnings.

Business & Operations:

• Facilities: Core terminal operations are Dahej (17.5 MMTPA) and Kochi (5 MMTPA, long-term contract).
• Shareholder: Govt-owned 50%, BPCL (ONGC, GAIL, IOCL) co-promoters.
• Issues:
  • Dahej Capacity: Expansion to 22.5 MMTPA delayed to Sep-25; no volume bookings secured, forecasting weak new capacity utilization. Increased volumes could be diverted from GAIL's Dabhol (round-the-year operation from FY26).
  • Kochi: 16 tbtu volumes in 4QFY25 (+7% quarter-over-quarter, 13% ahead YE), but growth faces delays in Kochi-B'lore pipeline commissioning.
  • New Venture: Landmark PDH-PP project involves significant capex; risks include oversupply in PP depressing margins post-commissioning (2028-2030).

Financial Highlights:

• Recent Results (4QFY25): EBITDA and PAT significantly ahead YE, driven by provision reversal and stable NRE margins.
• Capital: FY25 capex rose 73% YoY to Rs 14.5bn. FCF fell 27% YoY to Rs 29.5bn. Net cash position improved but won't significantly reduce with rising PDH-PP capex.
• Valuation Ratios: ROCE fell, P/B ratio declining. PT based on DCFE at ~12% COE.

Risks:

• Delayed Dahej expansion and weak utilization outlook.
• Continued muted volume growth driven by GAIL, compounded by spot LNG pricing.
• Competitive landscape, particularly in PP, and execution risk for the large PDH-PP project.
• Ongoing volatility of energy prices and potential currency fluctuations.

Key Strategy & Investment Thesis:

• Drive volumes through domestic demand increases and rolling out a 1,000 outlet network.
• Invest in bio-gas plants (Rs40bn) and expand into petrochemicals via high-risk, diversification play (PDHPP, PP).
• Maintain UNPF, setting 5% EPS CAGR guidance (though muted).

Overall Outlook:

• Annual volumes experiencing declines in FY25, likely facing further headwinds in FY26 due to GAIL's Dabhol. Earnings growth projection is flattish over FY25-27E.