PLNG delivered a strong performance in Q2FY21 driven by a quick rebound in volumes and higher blended gross margins partly due to adventitious gains; higher dividend payout was comforting. The mgmt assuaged concerns on its non-binding MoU with Tellurian, while indicating that availability of several low-priced long-term LNG contracts now obviates the need for equity investment to lock in volumes. We reiterate Buy with FV of Rs 300.
Higher-than-anticipated recovery in volumes and higher blended margins
Ebitda increased 17% y-o-y and 50% q-o-q to Rs 13.6 bn in Q2FY21, 18% above our estimate, reflecting (i) 2% y-o-y and 34% q-o-q increase in volumes to 254 tn BTUs; and (ii) a sharp jump in blended gross margins, which included Rs 700 mn of adventitious gains and higher trading margins led by recovery in spot LNG prices. Adjusted net income increased 18% y-o-y and 78% q-o-q to Rs 9.3 bn (EPS of Rs 6.2), 30% above our estimate, further boosted by a sharp jump in other income.
