Breaking Down Dorian LPG Ltd. (LPG) Financial Health: Key Insights for Investors

You're looking at Dorian LPG Ltd. (LPG) and seeing a shipping company in a historically volatile sector, so you need to know if the recent financial surge is real or just a blip. Honestly, the full-year 2025 numbers-like the $353.3 million in total revenue and $90.2 million in net income-tell only half the story, a story of a solid but slightly softer market where the Time Charter Equivalent (TCE) rate averaged $39,778 per day. But the real action is in the near-term trend: the Very Large Gas Carrier (VLGC) market is heating up fast, with the company's Q2 fiscal year 2026 TCE rate jumping dramatically to $53,725 per day. That's a massive spike, and it's driven by record global seaborne LPG volumes and US export strength, not just luck. This volatility means you need a clear-eyed view of their capital allocation-they returned $156.2 million in irregular dividends to shareholders in FY2025 alone-and their strategy to retrofit vessels for emerging ammonia transport. We need to break down whether their $2.14 diluted EPS for FY2025 is a floor or a ceiling, and what the next dividend move will defintely be, given the latest $0.65 per share declaration.

Revenue Analysis

You're looking at Dorian LPG Ltd. (LPG) because you know the Very Large Gas Carrier (VLGC) sector is volatile, and you need to see how their core business held up. The direct takeaway is that while fiscal year 2025 saw a sharp revenue contraction, the most recent data from Q2 FY2026 shows a strong, immediate rebound driven by a favorable shift in charter rates.

For the fiscal year ended March 31, 2025, Dorian LPG Ltd. reported total revenues of $353.3 million. This represents a significant year-over-year decrease of 37.0% compared to the prior fiscal year's revenue of $560.7 million. That's a massive swing, and it tells you exactly how sensitive this business is to the freight market.

Here's the quick math on what drives that number:

• Primary Revenue Sources: The company's revenue is fundamentally generated from chartering its VLGC fleet, which transports liquefied petroleum gas (LPG) globally. The revenue is recognized as net pool revenues (related party), time charters, and other revenues.
• Net Pool Revenues: A substantial portion of the fleet operates within the Helios Pool, an arrangement that aggregates vessels and shares the net earnings, essentially exposing a large part of the fleet to the spot market (or voyage charter) volatility.
• Time Charters: These are longer-term contracts that provide more stable, predictable cash flow, acting as a partial hedge against the spot market's wild swings.

The core health indicator for a shipping company is the Time Charter Equivalent (TCE) rate, which translates all the different charter types back to a standard daily rate. In fiscal year 2025, the average TCE rate per available day for Dorian LPG Ltd.'s fleet plummeted to $39,778, down sharply from $62,129 in the previous year. That drop in the daily rate is the single biggest factor behind the $207.4 million revenue decrease for the year. The primary culprit was lower spot rates, though lower bunker (fuel) prices provided a modest offset.

What this estimate hides is the near-term momentum. The market is a pendulum, and it swung back hard. As of the second quarter of fiscal year 2026 (ending September 30, 2025), revenue soared to $124.1 million, marking a huge 50.5% increase for the quarter year-over-year. This rebound was fueled by higher spot rates, pushing the average TCE rate back up to $53,725 per available day. This latest data confirms that while the annual 2025 numbers look rough, the operating environment is currently much more favorable.

To be fair, the nature of the VLGC market means you'll always see this kind of volatility. The key is how the company manages its fleet and capital through the troughs. You can read more about their strategic focus here: Mission Statement, Vision, & Core Values of Dorian LPG Ltd. (LPG).

Profitability Metrics

You're looking for the hard numbers on Dorian LPG Ltd. (LPG)'s financial performance, and the fiscal year 2025 (FY2025) data gives us a clear, albeit challenging, picture. The headline is this: a significant drop in market rates squeezed all of the company's core profitability margins, but operational efficiency kept them firmly in profitable territory. This is a cyclical business, and 2025 was a down-cycle year.

For the fiscal year ended March 31, 2025, Dorian LPG Ltd. reported total revenues of $353.3 million, a sharp decline of 37.0% from the prior year's $560.7 million.

Gross, Operating, and Net Margins

The core profitability ratios demonstrate how the drop in the Time Charter Equivalent (TCE) rate-which fell from $62,129 in FY2024 to $39,778 per available day in FY2025-impacted the business at every level.

Here's the quick math on the key margins for FY2025:

• Gross Profit Margin: The company achieved a Gross Profit of approximately $222.2 million ($353.3M Revenue minus $4.3M Voyage Expenses, $41.4M Charter Hire, and $85.4M Vessel Operating Expenses). This translates to a Gross Profit Margin of 62.89%.
• Operating Profit Margin: After accounting for $69.6 million in Depreciation and Amortization and $42.6 million in General and Administrative (G&A) expenses, the Operating Profit (EBIT) was approximately $110.0 million. This puts the Operating Profit Margin at 31.14%.
• Net Profit Margin: With a Net Income of $90.2 million, the Net Profit Margin for FY2025 settled at 25.53%.

Operational Efficiency and Cost Management

To be fair, a 25.53% Net Profit Margin in a year where the core revenue rate dropped by over a third is defintely a testament to strong cost control. The operational efficiency of Dorian LPG Ltd.'s modern Very Large Gas Carrier (VLGC) fleet is a key factor here. Vessel operating expenses per day actually increased slightly to $11,143 in FY2025 from $10,469 in the prior year, mainly due to a heavy drydocking schedule.

Still, the high gross margin shows that the variable costs of running the vessels remain well-managed relative to the TCE rate, even in a downturn. You can see the company's long-term strategic focus on its fleet in their Mission Statement, Vision, & Core Values of Dorian LPG Ltd. (LPG).

Industry Comparison and Trend Analysis

The trend is clear: profitability ratios were cut dramatically year-over-year, but they remain competitive within the sector. The Net Income of $90.2 million in FY2025 is a sharp decline from the $307.4 million reported in FY2024, reflecting the market's volatility.

When you compare Dorian LPG Ltd. to its peers, the picture is more nuanced:

Dorian LPG Ltd.'s full-year TCE rate of $39,778 was essentially on par with a major competitor's Q1 2025 rate of $39,800 per available day, demonstrating that the company performed in line with the market's challenging conditions. The fact that Dorian LPG Ltd. maintained a Net Profit Margin over 25% suggests superior control over fixed costs like G&A and depreciation, or a more favorable revenue mix from pool participation (Helios Pool accounted for 97% of revenues). This is a strong sign of resilience.

Your next step should be to model how a 10% increase in the average TCE rate-say, from $39,778 to about $43,756-would flow through to the Net Profit line, assuming costs remain steady. That's the key leverage point here.

Debt vs. Equity Structure

When you look at how Dorian LPG Ltd. (LPG) finances its operations, the picture is one of defintely prudent leverage, especially for a capital-intensive business like Very Large Gas Carrier (VLGC) shipping. The company is actively managing its debt down while also returning capital to shareholders, which is a powerful signal of balance sheet health.

As of the quarter ended September 30, 2025, the company's total debt stood at approximately $698.4 million, which breaks down into short-term debt and capital lease obligations of about $101.4 million and long-term debt and capital lease obligations of roughly $597.0 million. This is a significant reduction in overall indebtedness from prior periods, reflecting a clear strategy to deleverage.

The key metric here is the Debt-to-Equity (D/E) ratio, which measures how much debt a company uses to finance its assets relative to the value of shareholders' equity. For Dorian LPG Ltd., the D/E ratio for the quarter ended September 30, 2025, was a healthy 0.65. This means for every dollar of equity, the company uses about 65 cents of debt. To be fair, that's a conservative number.

Here's the quick math on how that leverage compares to the broader industry as of November 2025:

• Dorian LPG Ltd. (LPG) D/E: 0.65
• Marine Shipping Industry Average D/E: 0.79
• Oil & Gas Integrated Industry Average D/E: 0.64

The company's ratio sits comfortably below the average for the Marine Shipping sector, indicating less financial risk from leverage. Plus, their Net Debt to Total Capitalization was a low 15% as of December 31, 2024, which is a strong indicator of balance sheet strength.

The balance between debt and equity funding is dynamic. Dorian LPG Ltd. has been systematically reducing its average indebtedness, with the long-term debt balance dropping to $539.9 million as of September 30, 2025, from $606.6 million in the first quarter of fiscal year 2025. They are doing this while simultaneously engaging in equity funding and shareholder returns.

In the fiscal year ended March 31, 2025, the company issued 2,000,000 common shares at a price of $44.50 per share, which brought in fresh equity capital. But the bigger story is the return of capital: they declared and paid four irregular dividends totaling $156.2 million during FY2025, and this trend continued with a $0.65 per share irregular dividend declared in November 2025. This demonstrates a strategy of using healthy cash flows to both pay down debt and reward shareholders, rather than relying on new debt issuances for growth.

The company's debt is primarily managed under its existing credit facilities, like the 2023 Amended and Restated Debt Facility. The good news for investors is that the all-in cost of debt was approximately 4.7% as of December 31, 2024, which suggests favorable borrowing terms, though they anticipate a minor 30 basis point increase due to the roll-off of low-cost hedges. This focus on debt reduction and strong cash returns is a clear sign of a mature, financially disciplined operator. You can find a deeper dive into the company's full financial picture here: Breaking Down Dorian LPG Ltd. (LPG) Financial Health: Key Insights for Investors

Liquidity and Solvency

If you're looking at Dorian LPG Ltd. (LPG), the immediate takeaway is that their liquidity position is rock-solid. You want to see a company that can cover its short-term bills easily, and Dorian LPG Ltd. is doing that and then some. Their balance sheet strength gives them real flexibility, even as the volatile shipping market continues to swing.

The core of this strength lies in the company's current and quick ratios, which are both exceptionally high. As of November 2025, the current ratio sits at a strong 3.32, meaning Dorian LPG Ltd. has $3.32 in current assets for every dollar of current liabilities. Even better, the quick ratio is nearly identical at 3.30. This tells you that almost none of their current assets are tied up in slow-moving inventory, which is defintely a good sign for a shipping company where physical inventory is minimal.

Working Capital and Near-Term Strength

The working capital-the money left over if they paid all short-term debts immediately-is substantial. Based on the latest figures, short-term assets of $381.9 million comfortably outweigh short-term liabilities of $115.0 million, leaving a working capital balance of approximately $266.9 million. This cushion is a huge advantage, allowing them to weather market dips and fund vessel maintenance without stress. This is what financial discipline looks like.

• Current Ratio: 3.32
• Quick Ratio: 3.30
• Short-Term Assets: $381.9 million
• Short-Term Liabilities: $115.0 million

Cash Flow: The Engine Room

While the liquidity ratios look great, you must look at the cash flow statement to see where that cash is actually coming from and going. For the full fiscal year ended March 31, 2025, Dorian LPG Ltd. generated $173.01 million in cash from operations. That's the money from the core business of shipping LPG (liquefied petroleum gas). Here's the quick math on the major cash flow movements for the fiscal year 2025:

The clear trend here is a company using its operating cash flow to fund a very generous capital return program-they paid out $156.2 million in irregular dividends in FY 2025. Investing activities saw only $18.95 million in capital expenditures, which is relatively low for a fleet operator, suggesting a period of lower fleet renewal or maintenance spending compared to prior years. They had $268.4 million of free cash as of September 30, 2025.

Risks and Opportunities in the Cash Flow

The main thing to watch is the dip in operating cash flow (OCF). The OCF of $173.01 million for FY 2025 is a sharp drop from the prior year, driven by a decline in the Time Charter Equivalent (TCE) rate, which fell from $62,129 to $39,778 per available day year-over-year. That's a 36.0% decrease in the daily revenue performance of the fleet. So, while their current liquidity is excellent, a sustained drop in TCE rates will naturally pressure that cash flow engine. The good news is their debt is manageable, with debt well covered by operating cash flow at 23.1% and interest payments covered 7.2 times by earnings before interest and taxes (EBIT).

To dig deeper into the company's full financial picture, including valuation and strategy, you can read the full post here: Breaking Down Dorian LPG Ltd. (LPG) Financial Health: Key Insights for Investors. Your next step, as an investor, should be to track the Q3 and Q4 2026 TCE rates closely; that's the real driver of future cash flow and, ultimately, their irregular dividend policy.

Valuation Analysis

You're looking at Dorian LPG Ltd. (LPG) and asking the right question: Is this stock overvalued, or is there still room to run? The short answer is that, based on near-term 2025 metrics, the market views it as reasonably priced, but analysts see a significant upside. It's a classic case of a cyclical business trading at conservative multiples, but with a high cash return.

Here's the quick math on where Dorian LPG Ltd. (LPG) stands against its own recent performance and the broader market, using data primarily from the fiscal year ended March 31, 2025, and current November 2025 market prices.

As of November 2025, Dorian LPG Ltd. (LPG) is trading near the $24.89 mark, which is only a 2.1% increase from its price of $24.37 at the start of the year. The stock's 52-week trading range of $16.66 to $32.79 tells you the price has been volatile but is currently sitting in the lower half of that range.

• P/E Ratio (Price-to-Earnings): The trailing P/E ratio is a low 11.16. This is substantially less expensive than the Transportation sector average of around 16.38, suggesting the stock is undervalued relative to its earnings.
• P/B Ratio (Price-to-Book): The Price-to-Book ratio is 1.00. A P/B of 1.0 means the stock is trading exactly at its book value (assets minus liabilities), which is often a strong indicator of fair value or even undervaluation, as it implies you are buying the company's net assets for a dollar on the dollar.
• EV/EBITDA (Enterprise Value-to-EBITDA): This metric, which is better for capital-intensive companies like shipping, sits at 7.39 as of mid-November 2025. This is a healthy, conservative multiple for the sector, indicating the market isn't pricing in aggressive growth expectations.

Dividend and Payout Profile

Dorian LPG Ltd. (LPG) is a dividend machine, but you need to understand the 'irregular' nature of its payouts. For the fiscal year 2025, the company declared and paid four irregular dividends totaling $156.2 million. This high return to shareholders is a key part of the investment thesis. The trailing twelve-month (TTM) dividend yield is a compelling 9.83%.

The dividend payout ratio is a very sustainable 11.09%. This low ratio means the company is paying out only a small fraction of its earnings as dividends, leaving plenty of cash for fleet maintenance, debt reduction, or future special dividends. That's defintely a sign of financial strength.

Analyst Consensus: Buy Signal

Wall Street is generally bullish on Dorian LPG Ltd. (LPG), even with the recent volatility in very large gas carrier (VLGC) rates. The overall consensus rating from analysts is a 'Buy'.

The median analyst price target is set at $35.00, which represents a significant upside from the current price. Still, the range is wide, spanning from a low of $26.00 to a high of $39.00. What this estimate hides is the potential for spot rates to fall, which some bears predict could drop from an average of $50,000 per day to around $30,000 per day.

For a deeper dive into the company's full financial picture, including its strategic positioning, you can read the full post: Breaking Down Dorian LPG Ltd. (LPG) Financial Health: Key Insights for Investors.

Here is a summary of the key valuation metrics:

Risk Factors

You're looking at Dorian LPG Ltd. (LPG)'s financial health, and you need a clear view of the icebergs ahead. The direct takeaway is that while the company maintains a strong balance sheet and is proactively managing fleet efficiency, the near-term risk centers on volatile freight rates and a looming supply expansion that could pressure earnings, despite strong US export fundamentals.

The biggest external risk is the sheer volatility of the Very Large Gas Carrier (VLGC) market. For the fiscal year ended March 31, 2025, the Time Charter Equivalent (TCE) rate for Dorian LPG's fleet dropped sharply to $39,778 per available day, a significant fall from the prior year's rate. This directly impacted the top line, with fiscal year 2025 revenues coming in at $353.3 million, down from $560.7 million in the previous year. That's a huge swing.

Here's the quick math: a lower TCE rate means less cash flow, even with a stable fleet. Plus, operational costs are creeping up; vessel operating expenses per day rose to $11,143 in FY2025 from $10,469 in the prior year. This squeezes margins from both sides.

• Geopolitical tensions disrupt trade flows.
• Panama Canal congestion adds cost and time.
• New ship deliveries will dilute rates.

External Market and Geopolitical Risks

The VLGC market is highly sensitive to a few external factors. First, you have the Panama Canal's new dynamics. Drought-related transit restrictions continue to force longer routes, which absorbs vessel capacity and can temporarily support rates (like the Helios Pool TCE of $53,500 per day in Q2 2026/Q2 2025) but also introduces unpredictable scheduling and higher fuel costs. Second, geopolitical instability in the Middle East and the specter of a US-China trade war with renewed tariffs are defintely a risk, as they can suddenly reroute or halt major LPG trade lanes.

Another major headwind is the fleet orderbook (the list of new ships being built). The global orderbook contains 109 vessels, representing about 27% of the existing fleet as of Q1 2025. Analysts project that VLGC rates could decline by 19% in 2025 due to this supply influx, though the second half of the year is expected to be better than the first. The fastest fleet expansion is still ahead in 2026 and 2027, which will put sustained pressure on earnings.

Operational and Financial Risks

Operationally, the company faces a significant dry-docking schedule. Dorian LPG, along with other owners, reported that approximately 80 VLGCs are scheduled for mandatory maintenance (drydock) in 2025, which is double the number from the year before. This temporary reduction in available ships is a short-term positive for the market, but for Dorian LPG, it means a period of off-hire days and capital expenditure for maintenance and upgrades. You can't earn money when your ship is in the yard.

On the financial front, Dorian LPG's policy of paying irregular cash dividends (like the $0.65 per share announced in November 2025) means that future payouts are explicitly at the Board's discretion. While the company operates with a moderate debt level-net debt-to-total book capitalization was low at 16.4% as of September 30, 2025-investors relying on a predictable income stream face uncertainty.

Mitigation Strategies and Strategic Moves

Dorian LPG is not sitting still; their mitigation strategies are focused on operational excellence and future-proofing the fleet. The core strategy is maximizing efficiency and flexibility. They are investing in technical upgrades like hydrodynamic enhancing fins (Mewis ducts) and high-quality coatings to reduce drag and fuel consumption.

The company's fleet modernization efforts are key to navigating tightening environmental regulations like the EU Emissions Trading System (ETS) and IMO measures starting in 2025. They are also strategically diversifying the fleet's capability by retrofitting vessels to carry ammonia (Very Large Ammonia Carriers or VLACs). By the end of 2025, the fleet will have three VLGC/VLAC vessels capable of ammonia cargos, plus one newbuilding due in 2026. This prepares them for the next wave of energy transition. For a deeper dive into the company's financial structure, check out Breaking Down Dorian LPG Ltd. (LPG) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Dorian LPG Ltd. (LPG) after a challenging fiscal year 2025, but the growth story isn't dead; it's just shifted gears. The company reported a full-year revenue of $353.3 million for the fiscal year ended March 31, 2025, which was a sharp drop from the previous year, primarily due to lower Time Charter Equivalent (TCE) rates, which averaged $39,778 per available day. But honestly, the focus now is on what's driving the recovery and future earnings.

The near-term outlook is much stronger, as evidenced by the recent Q2 2026 results (reported November 2025), where revenue jumped 50.5% year-over-year to $124.1 million, with TCE rates leaping to over $53,700 per day. This rebound is built on a few key structural advantages and strategic moves that position Dorian LPG for significant future growth.

• Fleet Technology: Dorian LPG operates one of the youngest fleets in the Very Large Gas Carrier (VLGC) sector, which includes 20 fuel-efficient ECO VLGCs. Younger ships mean better technology and lower operating costs.
• Decarbonization Edge: The company has fitted 16 of its vessels with scrubbers (exhaust gas cleaning systems), which allows them to use cheaper, high-sulfur fuel oil while complying with emissions regulations. This provided a net savings of roughly $961,000 in the first fiscal quarter of 2026 alone.
• Ammonia Optionality: They are actively converting vessels to carry ammonia, a key future fuel and commodity. By the end of fiscal 2026, 5 VLGCs in the fleet will have this capability, which is a smart move to capture new market opportunities as the ammonia trade grows.

The real growth driver for Dorian LPG is the fundamental shift in global energy trade, specifically the robust growth in U.S. LPG exports. We're seeing a significant capacity expansion-about 13%-at U.S. Gulf terminals, which translates directly into more long-haul voyages for VLGCs. Plus, the ongoing geopolitical tensions are adding ton-miles (shipping distance) to the trade, which helps keep freight rates high.

Here's the quick math on analyst expectations for the next fiscal year. Based on the latest post-earnings consensus from November 2025, analysts are forecasting a meaningful revenue increase to approximately $400.5 million in fiscal year 2026, which is about a 12% jump from the prior 12 months. More impressively, per-share earnings (EPS) are expected to jump about 54% to $3.42. What this estimate hides, still, is the full impact of an extended period of high spot rates, which could push those numbers even higher.

Another competitive advantage is the Helios Pool, which Dorian LPG operates in a joint venture with MOL Energia. This is the largest VLGC pool in the world, giving them unparalleled market coverage and operational flexibility across the US, European, and Asian markets. This scale and partnership help them secure better contracts and manage vessel deployment more defintely than smaller players.

For a deeper dive into the balance sheet and valuation, you can read the full post here: Breaking Down Dorian LPG Ltd. (LPG) Financial Health: Key Insights for Investors. Your next concrete step should be to model the impact of a sustained TCE rate above $60,000 per day on the FY2026 EPS forecast.