Petronet LNG Limited

Petronet LNG achieved its highest ever overall volume throughput of 934 TBTU in FY25, an increase from 919 TBTU in the previous year. Profit Before Tax (PBT) for FY25 crossed INR5,000 crores for the first time, reaching INR5,275 crores, with Profit After Tax (PAT) at INR3,926 crores, both growing 11% year-on-year. Q4 FY25 also marked the highest ever quarterly profits, with PBT at INR1,446 crores (up 45.2% YoY) and PAT at INR1,070 crores (up 45% YoY).

The company is expanding its Dahej terminal from 17.5 to 22.5 million tons, expected to be ready for commissioning within 3-4 months. A crucial 7.5 million tons long-term contract with Qatar was renewed on February 6, 2024, for another 20 years (2028-2048), with GAIL, Indian Oil, and BPCL assuring to off-take the entire volume. Discussions are ongoing for definitive downstream agreements related to this volume.

The petrochemical project at Dahej is on track for production by the end of Q4 FY28, with significant work in progress and long-lead item orders placed. The company has targeted a capex of INR2,500 crores for this project within the overall FY26 capex program of INR4,500-5,000 crores. Other capex includes INR80-100 crores for Kochi terminal routine capex, INR75-80 crores for truck-loading facilities, and INR300 crores for the Gopalpur LNG terminal.

While overall FY25 volumes were strong, Dahej Terminal's Q4 FY25 volume declined to 189 TBTU from 219 TBTU in Q4 FY24 (down 13.7% YoY). This was attributed to higher spot LNG prices making liquid fuels more competitive and temporary shutdowns at major fertilizer plants. Despite this, management expects Indian gas demand to grow 6-7% annually and anticipates continued momentum in utilization, especially with increased LNG availability globally.

Management clarified that no bank guarantees were encashed for CY21 and CY22, as all dues were paid by offtakers. A provision reversal of approximately INR315 crores related to CY21 UOP dues contributed positively to Q4 financials. The Ind AS impact for FY25 resulted in a net positive of INR13 crores, with a gross margin positive of INR619 crores, partially offset by forex loss, depreciation, and finance charges.

The Board approved the Gopalpur LNG terminal project in 2022, and land acquisition is in an advanced stage. The estimated capex for this land-based terminal is INR2,300 crores, with a construction timeline of 3-4 years. Discussions are underway with promoter offtakers for capacity booking, and the company is confident in the terminal's utilization given the growth of the natural gas market in the eastern region.

The utilization of the Kochi LNG terminal is expected to improve significantly once the pipeline connectivity to Bangalore is completed. Management is confident that this pipeline will be finished by the end of the current calendar year, a project actively monitored by the PRAGATI at the Prime Minister's office.