Petronet LNG

Petronet LNG reported a robust financial performance in Q4 FY26, achieving its highest ever quarterly PBT and PAT. PBT stood at INR 1,795 crore, a 24.14% increase YoY, while PAT reached INR 1,338 crore, growing 25.04% YoY. This performance was delivered despite a challenging external environment due to the ongoing crisis in the Gulf region, reflecting the resilience of the company's operations and commitment of its teams. The company also received INR 630 crore in outstanding Use of Pay dues pertaining to calendar year 2022.

The overall LNG volume processed in Q4 FY26 was 219 TBTU, a 6.8% increase YoY but a 6% decline QoQ. The Dahej terminal processed 201 TBTU, maintaining a strong capacity utilization of 90.1% for the quarter. However, March 2026 saw a significant drop in Dahej utilization to 53% due to the Gulf crisis, though January and February averaged 108%. The Kochi terminal achieved its highest ever annual volume throughput of 68 TBTU for FY26, marking an encouraging milestone.

To mitigate geopolitical risks, Petronet LNG is actively diversifying its LNG supply sources beyond traditional regions. New supplies are coming from Oman, Mozambique, Nigeria, Congo, Mauritania, and Senegal. Notably, a new contract with Exxon, signed in 2017, commenced in April 2026, with the first cargo received. This contract, along with a new one with Equinor, is expected to add approximately 1 million tons of volume in FY27, supporting overall throughput.

The company has ambitious capex plans, with a proposed budget of around INR 9,000 crore for FY27, and a similar amount for FY28. The major portion, approximately INR 7,500 crore, is allocated to the petrochemical project, which is progressing on track with equipment sourced globally. Other significant capex includes INR 600 crore for the third jetty, INR 300-400 crore for the Gopalpur terminal, and INR 70 crore for a fifth small-scale LNG plant at Kochi. INR 390 crore was capitalized in Q4 FY26, with another INR 100 crore expected in Q1 FY27.

The company provided a detailed breakdown of the Use of Pay (UOP) accounting adjustments. A reversal of INR 550 crore was made for CY22, while provisions of INR 35 crore for CY23 and INR 6 crore for CY24 were recorded. Additionally, a waiver of INR 13 crore was granted in the current quarter due to higher volumes. After adjusting for these provisions and waivers, the net reversal amounted to INR 496 crore. The regas revenue for the quarter was INR 879 crore, with an inventory gain of INR 95 crore.

Management is in constant communication with Qatar Energy and is hopeful that LNG supplies will resume within three to four weeks once the Gulf conflict ends, potentially from June onwards. While a specific utilization target for FY27 cannot be provided due to geopolitical uncertainties, the company expects an improvement from the March lows. The commencement of new contracts and growing Indian gas demand, particularly from the power sector, are expected to support increased utilization.

Addressing the national need for increased storage, Petronet LNG is actively expanding its infrastructure. Plans include constructing two tanks at the Gopalpur project and one more tank at Kochi. The company is also scouting for additional land parcels at Dahej to potentially add 3 to 4 more storage tanks, although there are no immediate plans for these. The additional tank in Kochi is estimated to cost around INR 1200 crore.