Large-cap stock declares ₹7 per share dividend, yield goes to 3.28%

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With a market valuation of 31,822.50 Cr, Petronet LNG Ltd. is a large-cap company that operates in the energy industry. One of the leading public limited corporations in the industry, Petronet LNG Limited operates in the Indian energy market. With a current nominal capacity of 17.5 MMTPA, it has built the nation’s first LNG receiving and regasification facility in Dahej, Gujarat, and another terminal in Kochi, Kerala, with a notional capacity of 5 MMTPA. For the fiscal year 2022–2023, the corporation has announced a dividend of Rs. 7 per share.

The company has said in a stock exchange filing that “Pursuant to the Regulation 42 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, we hereby inform that the Record date has been fixed as Tuesday, 22nd November 2022 for the purpose of ascertaining the entitlement of Members to the Special Interim Dividend of Rs. 7/- (Rupees Seven only) per share (on the face value of Rs. 10/- each) on the equity shares of the Company for the financial year 2022-23 declared by the Board of Directors of the Company in their meeting held on 9th November 2022. The above said declared special interim dividend shall be paid on Monday, 5th December, 2022. The dividend warrants would be posted on Monday, 5th December, 2022 and within 30 days from the date of declaration of special interim dividend as provided in the Companies Act, 2013.”

On a standalone basis, the company declared a net sales of 15,985.73 crore in Q2FY23 compared to Rs. 10,813.08 crore posted in Q2FY22, representing a YoY growth of 47.84%. The company declared a net profit of Rs. 744.25 crore in Q2FY23 compared to Rs. 823.02 crore posted in Q2FY22, representing a YoY fall of 9.57%. Petronet LNG EPS has decreased to Rs. 4.96 in the quarter ended September 2022 from Rs. 5.49 posted in the year-ago quarter.

On a consolidated basis, the company declared a net sales of 15985.73 crore in Q2FY23 compared to 10813.08 crore posted in Q2FY22. Petronet LNG’s net profit declined by 3.90% to 785.73 crore in the quarter that ended in September 2022 from 817.61 crore in the quarter that ended in September 2021. Petronet LNG EPS has decreased to Rs. 5.24 in the quarter ended September 2022 from Rs. 5.45 posted in the year-ago quarter.

Post the Q2 results of Petronet LNG, the research analysts of the broking firm Prabhudas Lilladher said “We tweak our FY23/24E estimates by ~0.5%, as we incorporate H1 BS. PLNG reported in-line results with EBIDTA and PAT of Rs11.7bn (+10%Q/Q; PLe Rs11.0bn) and Rs7.4bn (+6%Q/Q, PLe Rs7.3bn), as higher margins compensated for lower than expected volumes. Recent softening of spot LNG prices to USD24/mmbtu from Q1 level of USD46/mmbtu augurs well, as spot volumes for H1FY23 were muted at 3tbtu vs 15tbtu in H1FY22. Additionally, the company’s long term contract is best suited in uncertain global economy. We believe PLNG is a formidable play on India’s rising LNG imports, despite rising domestic gas production backed by 1) high earnings visibility and 2) limited competition to its well-entrenched reach in LNG business. Reiterate ‘BUY’ with a DCF based PT of Rs325 (Rs307), as we update our H1FY23 BS.”

The research analysts of the broking firm Motilal Oswal said “We remain positive on the gas story in India, which is set to clock a CAGR of 6–8% as per our gas demand-supply model, led by: a) development of new CGDs and b) higher consumption at fertilizer and refining/petchem plants. Total capex guidance for FY23-24 is at INR42.5b. The company would set up a petrochemical project wherein it would produce PDH-PP (capacity of 500ktpa) and another product as already guided. It is also setting up two new tanks at Dahej at a capex of INR12.5b by CY24E. About 39% of the project has been completed. A third jetty is coming up at Dahej with a capex of INR17b. FSRU on the East coast may cost the company INR15b along with a brownfield expansion of 5mmtpa at the Dahej terminal at a cost of INR6b (to be completed in phases by CY24E or early CY25E). The stock trades at 5.4x FY24E EV/EBITDA. We value PLNG on a DCF basis to arrive at a fair value of INR297; maintain BUY.”

Petronet LNG Ltd. shares ended trading on Friday at 212.90 a piece, down 0.82% from the previous close of 214.65. At the current market price, the dividend yield climbs to 3.28% when the special interim dividend of Rs. 7 is taken into account. For the fiscal year that ends in March 2022 or FY22, Petronet LNG has announced a 115.00% dividend at a face value of 10 each or 11.5 per share. This yields a dividend of 5.42% at the current share price.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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