Petronet LNG Q4 FY26 Results: Profit Surge Amid Lower LNG Costs and Supply Disruption

 

Petronet LNG Q4 FY26 Results: Profit Surge Amid Lower LNG Costs and Supply Disruption

• In Q4 FY2025-26 (Jan–Mar 2026), Petronet LNG delivered record profitability on a softer top line. Consolidated net profit rose 25.3% YoY to ₹1,337.6 crore (up from ₹1,067.6 Cr), even as revenue from operations fell ~23% to ₹9,642.3 crore. The cost of materials consumed (largely LNG feedstock) plunged ~28.5% YoY to ₹7,746 crore, reflecting much cheaper gas prices before the crisis. The Board has proposed a final dividend of ₹3.00 per share for FY2025-26. (This strong Q4 P&L contrasts with a flat-to-down full-year FY26 performance: consolidated revenue –14.3% and PAT –1.9% YoY.)
• Factors behind the profit jump: Analysts note that the profit surge owed mainly to lower input costs and one-off gains, not higher volume. Petronet’s Q4 profits were “on the back of a softer revenue base and lower costs”. In particular, cheaper LNG imports in Q1–Q2 2026 (when global spot prices were relatively mild) sharply cut regasification costs. Other boosts included a ₹630 crore recovery of “use-or-pay” dues and the reversal of impairments, which together added to net income. Throughput at Dahej held up: ~201 TBTU of LNG processed in Q4 (vs 189 TBTU a year earlier, 214 TBTU in Q3) with ~90.1% utilisation. In short, margin expansion drove the earnings: Q4 EBITDA jumped sequentially 55%, lifting EBITDA margins to ~19.7% (from ~10.7% in Q3) as spot LNG prices dipped.
• West Asia conflict – supply halt: The Middle East war radically disrupted Petronet’s main supply line. Iran’s March strikes on QatarEnergy’s Ras Laffan LNG complex (on Mar 2) forced Qatar to declare force majeure on several trains. As a result, no LNG cargoes from Ras Laffan have arrived at Petronet’s Dahej terminal since early March. CEO A.K. Singh confirmed that Qatar normally supplied 9–10 cargos monthly, but none came in March or April, and shipments for May (and even June) are “expected to be similarly affected”. (Some analysts warn the shutdown could last at least 3–4 months.) This gap in imports has strained India’s gas supply, prompting government rationing of PNG/CNG and cuts for industries.
• Spot prices spiked, then eased: Globally, LNG markets were actually softening in early 2026 before the war. IEA reports that abundant new supply (especially U.S. export growth) eased fundamentals in H2 2025, bringing Asian spot prices down ~17% vs H2 2024. Petronet’s high Q4 margins reflected this “favourable gas price regime” – i.e. cheaper spot LNG in Jan–Feb. After the March disruptions, spot prices briefly jumped (Japan/Korea MMBtu hit ~$24–25) and then moderated to the mid-$10s. Even so, landed LNG prices to India’s west coast were about 34% higher by mid-March ($25.10/mmbtu) than before the war. In practice, Petronet’s regas margins nearly doubled in Q4, underscoring how lower LNG feed costs bolstered profits. (Future margins will hinge on how quickly global prices normalize. Petronet executives say full contracted shipments from Qatar should resume once the Middle East crisis “stabilises”.)
• Diversified import mix – alternative suppliers: India has scrambled to replace missing Qatari LNG. Data from Kpler/FE show April 2026 imports went to new sources: Qatar and UAE fell to zero, while Oman (585 kt in Apr vs 222 kt in Jan) and Nigeria (482 kt vs 280 kt) surged. Smaller volumes arrived from Angola (~275 kt), and the U.S. lifted shipments (from 138 kt in Jan to 339 kt in Mar). Even Australia, Indonesia and Mauritania saw maiden imports. Nevertheless, April’s total LNG imports (1.947 Mt) remained below January’s 2.577 Mt. On the demand side, India’s gas consumption dipped ~20% in March 2026 (to ~155 mmscmd) due to the 34% cut in LNG receipts. The government invoked supply-control measures (Natural Gas SRO 2026), reserving 100% of needs for CNG/domestic PNG and capping fertilizer at 70%. As a result, city-gas demand held up (+3% YoY) while industry and power use fell.
• Petronet outlook – margins, dividends and risks: Looking ahead, Petronet’s near-term margins will depend on volatile LNG prices and shipping. The Q4 dividend of ₹3.00/share reflects strong cash generation. Management is also bolstering infrastructure: 7 new LNG storage tanks are planned (2 at Gopalpur, 1 at Kochi, 4 at Dahej) to cushion future shocks. In fact, analysts note the storage expansion will let Petronet “manage supply volatility more effectively”. Petronet remains locked into long-term deals (7.5 Mtpa from Qatar until 2028, rising to 15 Mtpa beyond) and believes “full supply” will return after the geopolitical situation calms. However, prolonged disruption in Ras Laffan (damage may sideline ~12.8 Mtpa for years) poses a risk to volumes. In sum: Q4 profits were bolstered by low pre-crisis gas costs and operational efficiency, but sustaining those gains will require navigating higher spot prices and strained supply in the coming months.