PETRONET - PETRONET LNG LTD. Share Price

During the Q4 FY '26 earnings conference call, management provided a positive outlook for Petronet LNG Limited, emphasizing resilience despite challenges. Key points included:

1. Operational Performance:

   • LNG Volume Processed: The overall LNG volume processed stood at 219 TBTU, down from 233 TBTU in the previous quarter but up from 205 TBTU in the same quarter last year.
   • Dahej Terminal: LNG throughput at the Dahej terminal was 201 TBTU, compared to 214 TBTU in the prior quarter and 189 TBTU YoY. Capacity utilization was 90.1%, slightly lower than 93.8% in the previous quarter.
   • Kochi Terminal: Achieved a milestone by recording the highest annual volume throughput of 68 TBTU during FY '25-'26.

2. Financial Highlights:

   • PBT: Reported a profit before tax of INR 1,795 crore for the quarter, up from INR 1,144 crore QoQ and INR 1,446 crore YoY.
   • PAT: Recorded a profit after tax of INR 1,338 crore, compared to INR 848 crore in the last quarter and INR 1,070 crore in Q4 FY '25.
   • For FY '26, PBT was INR 5,158 crore and PAT was INR 3,843 crore, slightly down from previous year figures.

3. Dividend Recommendations: The Board recommended a final dividend of INR 3 per share for FY '26.

4. Future Expectations: Management expressed hope for normalization of LNG supplies from Qatar within 3-4 weeks post-conflict resolution in the Gulf, which could significantly enhance operational performance. A CAPEX budget of INR 9,000 crore for FY '27 was mentioned, highlighting ongoing expansion projects.

Overall, management underscored a commitment to operational efficiency and reliable service amidst geopolitical challenges, with expectations for throughput and financial performance to improve moving forward.

Major Questions and Detailed Answers from the Q&A Section

1. Question: "How has March actually looked in terms of volumes? You talked about utilization of 90%, but what was the volume shortfall, if any, in March?" Answer: "In March, the Dahej capacity utilization was about 53%, and Kochi was just over 20%. So, we faced some challenges that month, but things have started to improve since then."

2. Question: "How do we look at FY '27? If the dispute continues, how much of our volumes can be potentially at risk?" Answer: "March's utilization was low, but we are seeing improvement in early April. With the recent drop in LNG prices to $15-$17, our utilization is steadily increasing. If the conflict lingers, it will be challenging, but Indian gas demand is still growing."

3. Question: "Have you had any communication with Qatar regarding the status of supply?" Answer: "Yes, we're in constant touch with Qatar Energy and are hopeful that once the conflict ends, supplies will resume within three to four weeks."

4. Question: "Are you receiving supplies for your petrochemical project on track?" Answer: "The petrochemical project is on track as required equipment comes from regions outside the Gulf, mainly from Japan and Europe, so there are no supply issues affecting that."

5. Question: "What does the CAPEX budget for FY '27 look like?" Answer: "The proposed CAPEX budget for FY '27 is around INR 9,000 crores, primarily for the petchem project, with about INR 7,500 crores allocated for that."

6. Question: "Can you provide clarity on the reversal of provisions related to gas supply from Qatar?" Answer: "The reversal we did amounted to INR 550 crores for CY '22, with INR 35 crores for CY '23 and INR 6 crores for CY '24 to account for expected future provisions."

7. Question: "What is the expected utilization level for FY '27 if the Qatar supply doesn't return?" Answer: "While cautious, we believe the situation will normalize soon. We remain optimistic, so we don't anticipate drastic under-utilization over the year ahead."

Each answer stays within the character limit and reflects the insight and forward guidance provided during the earnings call.