PETRONET LNG @ Rs 162…this is the Company I was referrring to, Anand,Rohit and Kishor

Hi Anand,Rohit and Kishor…..I was’nt referring to Essar Oil in the earlier Blog….the Company that I have in mind is PETRONET LNG @ Rs 162…It’s IPO was in early 2004 at Rs 15 and got listed at Rs 16.50…at the time the then MD and CEO ,Mr Mathur and Director Finance,Mr Dasgupta has asserted strongly that after 5 years the Company would take on a different momentum after Terminals and Capacities went on stream fully….they were fully right !…the Company has been promoted by India’s leading Oil and Gas PSUs…GAIL,ONGC,Indian Oil and BPCL …It imports LNG largely from Ras Gas ,Qatar by Specialised LNG Shipping Carriers  and regasifies it at it’s Dahej and Kochi Terminals for distribution largely through a strong Pipeline Network…It’s a Capital Intensive Business with a fairly long Gestation Period…and requires strong Domain Technical and Operating Expertise and a robust Distribution Infrastructure…explains why it is a PSU promoted by other PSUs  

PETRONET LNG

 

IPO Rs 13-Rs 15 ~ Price Fixed Rs 15 ~March  2004

 Size Rs 26 crs ~ Oversubscribed 4.2 Times

 

SHARE  PRICE TREND ON THE BSE 2004-2012

 

Year

Open
Price

High
Price

Low
Price

Close
Price

 
 

2004

16.50

33.25

14.45

31.35

 

2005

31.80

71.90

31.60

65.95

 

2006

66.40

68.50

35.50

48.20

 

2007

48.50

117.50

41.15

107.30

 

2008

108.90

121.90

29.65

39.60

 

2009

40.00

82.40

31.60

71.65

 

2010

72.00

131.30

69.00

124.95

 

2011

126.00

185.85

105.10

155.80

 

2012

157.75

179.75

150.50

161.70

 

 Last Year in 2011 while Sensex retreated 25%,PETRONET LNG was up smartly from end 2010 levels of Rs 125 to close 2011 at levels of Rs 150 + after recording it’s alltime high of Rs 186 in the year

The huge shortage of gas in India has prompted the company to fast track the Dahej Expansion to 15 Million Tonnes by not waiting for the Storage Tanks to come up,but focuisng to get the marine and regasification facilities up first…Storage Tanks take upto three and a half years to four years to be up while the regasification unit can be set up in Two years as too the Jetty….These new expansion facilities should be ready mid 2013….With 15 Million Tonnes Capacity the Dahej Terminal will be the second largest in the world …the largest with a capacity of 17 million tonnes is in the UK

Domestic Gas Shortage has two clear reasons

~ Falling Production from Reliance’s KG-D6 field

~Surge in Demand from Power and Fertiliser Sectors

By 2015,India’s LNG regasification capacity would be 30 Million Tonnes,up from just 13 Million currently….PETRONET LNG would have 15 Million capacity at Dahej and 5 Million capacity at Kochi…. Around 75% of the demand is from The Power Sector,followed by Fertilser and then City Gas and Others 

The Financials are also pretty robust….The Dividend record extends to five years now with it being raised to 20% in FY 2011,when the Sales crossed Rs 13000 crs and the PAT was the highest ever @ Rs 620 crs giving an EPS of Rs 8+on an Equity of Rs 750 crs (FV Rs 10)….Networth was Rs 2700 crs at March 31,2011 and should cross Rs 3200 crs in FY 12 

The Company approved the fresh expansion of Rs 3000 crs a few months ago 

So the Company has visible Growth and Scale Potential in the coming years and the Sentiment and Momentum are good…..The Risk is in the Current Valuation vs Share Price Matrix

You did not catch this when it was a Baby in 2004….you missed the movement into Rs 100 +…you remained skeptical on macros in 2009 and missed a superb entry point…..then you missed  the 2010 and 2011 run….Now  You need to have Patience and Temperament with PETRONET LNG and a three year view ~Then,even at Rs 162 it would look good for a Three Year Doubler

I personally do not hold the Share ,but some clients would

Cheers !

2 thoughts on “PETRONET LNG @ Rs 162…this is the Company I was referrring to, Anand,Rohit and Kishor

  1. Dear Sir,
    What are your views on Titan Ind. If someone holding from very long (10 years+), is it a time/price for investment sell. OR titan can still give reasonable return for couple of more years from here onward. ( From CMP)

    Regards
    Kishor

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