The variation at the PAT level was less due to lower rate of depreciation as per the Companies Act 2013 and higher other income at R35.3 crore (+132% y-o-y, +15% q-o-q).
Despite higher overall volumes at 138tbtu (est at 132tbtu, -2% y-o-y, +12% q-o-q), the decline in Ebitda was led by a fall in marketing margin (est at $0.14/mmbtu vs $0.55/mmbtu in Q4FY14) on short-term volumes.
We cut FY16E/FY17E EPS by 12%/6%, led by 4-6% volume cut and nil marketing margins in FY16E/FY17E, partly negated by lower depreciation. While we are positive on the long-term prospects for PLNG, we are concerned with the continued delays in Kochi ramp-up and believe that current valuation (FY16E P/E of 16.1x) adequately factors in the medium-term growth prospects. Downgrade to neutral.
Q1FY15 Dahej re-gas volume stood at 138tbtu (2.7mmt, -2% y-o-y, +12% q-o-q), which includes long-term 96tbtu (flat y-o-y, -2% q-o-q), third-party 24.8tbtu (+76% y-o-y, +107% q-o-q) and short-term 17tbtu (-44% y-o-y, +35% q-o-q). Kochi throughput at 0.66tbtu (vs 1tbtu in Q4FY14) implies 1% utilisation and ramp-up is contingent on pipeline connectivity.
PLNG received the Andhra Pradesh governments nod to set up the Gangavaram terminal and expects to complete it in 36 months, post-EPC contract award. LNG affordability has increased for liquid fuel users with low spot prices ($10-11/mmbtu), but a sharp volume increase is not expected in the near term. These prices still remain unviable for power producers.