PETRONET - PETRONET LNG LTD. Share Price

Petronet LNG Limited's management provided a positive outlook during the Q1 FY '26 conference call held on July 28, 2025. Key highlights from the call include:

1. Financial Performance: The profit before tax for Q1 stood at INR 1,136 crores, down from INR 1,446 crores in the previous quarter and INR 1,520 crores in the same quarter last year. Profit After Tax (PAT) was INR 851 crores compared to INR 1,070 crores and INR 1,142 crores in the previous quarter and year, respectively. The net worth rose to INR 20,233 crores, up from INR 19,382 crores as of March 31, 2025.

2. LNG Volumes: The Dahej terminal processed 207 TBTU, reflecting a 10% increase from 189 TBTU in the previous quarter, although down from 248 TBTU year-over-year. Overall, the volume processed was 220 TBTU, up 7% from 205 TBTU in the last quarter.

3. Strategic Expansion: The Board approved an investment of INR 6,355 crores for a 5 MMTPA LNG terminal at Gopalpur Port, Odisha, transitioning from an earlier 4 MMTPA FSRU project. The completion timeline for this greenfield project is approximately three years. They also issued an RFP for a INR 12,000 crores rupee term loan to support the capex program.

4. Market Position: Management highlighted resilience in a volatile energy market due to stable LNG prices and higher capacity utilization. They are committed to strategic capacity expansion, rigorous cost optimization, and growth aligned with market demands to maintain their leadership in India's LNG sector.

5. Long-term Contracts and Market Outlook: Management anticipates more comfortable pricing in the LNG market, projecting India's consumption to double by 2028-2030, underlining their position to capture this growing demand through strategic infrastructure development.

These points showcase Petronet's commitment to growth and strength in the LNG market while facing challenges and opportunities in a changing energy landscape.

1. Question: "How is the company managing global LNG price volatility and geopolitical risk, especially in terms of long-term supply contracts?"
Answer: "Our contracts are linked to stable oil prices, which have been between $65 to $70, reducing risk from geopolitical issues. Although spot prices are slightly volatile, they're still stable compared to two years ago. Overall, we're confident that we won't face significant challenges from these factors."

2. Question: "What are the new strategies being implemented to reignite the top line growth?"
Answer: "Demand from sectors like power and fertilizers has varied, causing a decline this quarter. However, overall, we've maintained stability. We're seeing a sequential increase in processed LNG volumes, indicating adaptability to market changes and potential future demand growth."

3. Question: "Can you provide details about the agreement with Deepak Fertilisers, including start date and pricing?"
Answer: "The contract for 1.1 million tons begins between May and July 2026, with pricing matching our other long-term agreements. There's a potential for volume to increase to 0.65 million tons based on supplier capabilities."

4. Question: "What is the current situation regarding the Qatar extension?"
Answer: "The deal with Qatar remains contingent on offtake commitments from GAIL, IOCL, and BPCL. We're currently negotiating downstream agreements but cannot provide a specific timeline for completion right now."

5. Question: "How do you see the demand from the fertilizer and power sectors trending for FY "˜26?"
Answer: "After a dip last quarter, demand is starting to recover, with throughput having increased by 10%. Long-term prices remain affordable compared to alternatives. We expect this discrepancy to continue impacting demand until improvements occur in gas availability from next year onwards."

6. Question: "Can you update us on the expansion at Dahej from 17.5 MMTPA to 22.5 MMTPA?"
Answer: "The jetty construction is on schedule, though some delays occurred due to monsoon and security concerns. We anticipate completing construction by year's end, with commissioning starting in Q1 of the following calendar year."

7. Question: "What is the capex outlook for the next couple of years?"
Answer: "For the current year, we've targeted around INR5,000 crores in capex, primarily for the petchem plant, the third jetty, and other projects. Looking ahead, we expect an increased budget next year, projected at INR30,000 crores across initiatives."

8. Question: "How does the Gopalpur terminal fit into the market and will it compete with existing terminals?"
Answer: "The Gopalpur terminal has a strong chance to be another key player like Dahej, bolstered by extensive pipeline connectivity. While competition exists, we believe our experience and positioning will allow it to succeed effectively."

9. Question: "What was the trading gain and inventory impact in the current quarter?"
Answer: "The inventory gain for this quarter was INR42 crores; however, there were no trading gains due to current market pricing conditions."

These responses encapsulate the key concerns of participants while providing insight into Petronet LNG's strategic direction and operational performance.