Aegis Logistics - Can It Be Exception?

This was an interesting prospect for investment for me but I decided against it at this time. I thought I’d share my views on what made me want to avoid investment at this time.

  1. Company has been (of late) losing market share in the LPG segment due to various factors such as loss of BPCL at Haldia, medium size LPG carrier availability affecting Pipavav operations. This will take longer than expected to resolve and their aspirations of 25% market share will be difficult to achieve.

  2. Sharp increase in the Contingent Liabilities yoy on account of 142cr NGT order with regards to the Air pollution issue at Mumbai. Contingent Liabilities now stands at 243cr (12.5% of networth) FY21 AR

The air pollution issue just highlights the exponential threat associated with the nature of this business what accidents/fire/pollution can wipe out years of profitability.

  1. LPG domestic segment demand is linked to government policy (subsidy etc) and its cost relation to alternatives such as PNG etc

  2. An unknown element of risk with the BPCL - Adani stake acquisition (if that were to materialize)

Please note this is just my opinion and I am open to learning and understanding the business better. Contrary arguments would be greatly appreciated as I may be wrong in my analysis.



I think your inference for <1> is not right. I will request you to check volumes for liquid cargo for GPPL and its management guidance and capex. It will help you in doing channel check for what Aegis management is saying.

I think, share price is in correction due to uncertainty around Vopak merger and demise of Anish (MD).
Best thing about aegis is location of its terminals and moat of entering in GAS sector.
It takes time and significant investment to achieve good scale.

Counter views always welcome .

Disc : Invested


The recent series of disclosures about slump sale of liquid division into a new entity gives very good insights into the contribution of Mumbai terminal (which was 100% retained by Aegis) to company’s profitability.

FY21 Liquid division revenue: 234 cr.

  • Haldia: revenue: 27.01 cr.; net worth: 197.09 cr.; slump sale at 240 cr. (capacity: 174’690 kl) (link)
  • Kandla (LPG storage + liquid): revenue: 40.66 cr.; net worth: 486.35 cr.; slump sale at 830 cr. (capacity: 140’000 kl) (link)
  • Mangalore: revenue: 8.79 cr.; net worth: 97.49 cr.; slump sale at 120 cr. (capacity: 25’000 kl) (link)
  • Pipavav: revenue: 4.05 cr.; net worth: 78.36 cr.; slump sale at 170 cr. (capacity: 120’120 kl) (link)
  • Kochi: revenue: 8.39 cr.; net worth: (-) 16.72 cr.; slump sale at 18.5 lakhs (capacity: 54’000 kl) (link)
  • Implied Mumbai sales ~ (234-27.01-40.66-8.79-4.05-8.39) ~ 145 cr (capacity: 273’000 kl).

So Mumbai contributes >60% of revenues and probably higher profitability (because of mix of more complex chemicals). No wonder why this was not merged into the Vopak JV.

Disclosure: Invested (position size here)


FY22Q3 concall notes:

  • Pipavav: LPG jetty work for handling VLGC is expected to completed by June 2022 (extended from April 2022)
  • Kandla: Targeting 1 MT gas volumes in first year of operations (assuming commercialization goes smoothly)
  • Haldia: Recovered significant volume due to HPCL ramp up, should be back to pre BPCL exit volumes in 2 quarters (revised from earlier guidance of March 2023)
  • Mumbai: Current throughput capacity is only 1.1 MTPA, this will increase to 1.5 MTPA only in FY23
  • Autogas division: Not happy with the current volumes and want to improve it, EBITDA margins have been maintained at 10’000/ton
  • Liquid division margins largely vary b/w 65-70% (depending on the kind of liquids stored)

Disclosure: Invested (position size here)


Adding LPG import data points taken from “Petroleum Planning and Analysis Cell” here:


LPG import is at 1445 million tonnes for March 2022
Huge improvment vs Feb


Aegis reported good set of numbers with 3-year EPS growth reverting back to 20% trajectory (FY20Q1 ~ 1.71, FY23Q1 ~ 2.95). Industrial gas supply through Kandla led to strong growth in realizations, with gas division reporting EBITDA of ~1510 / MT. Industrial gas distribution profitability contributes directly to Aegis’ nos as it is outside the ambit of Vopak JV, which is why EPS grew strongly despite muted gas logistics volumes. The concall notes are below.

FY23Q1 concall

  • Pipavav: LPG jetty work for handling VLGC is expected to completed by September 2022 (extended from June 2022)
  • Kandla:
    o Distribution volumes shot up due to supply to industrial belt of Morbi and nearby regions. This is not a one-off and should sustain
    o On course to achieve 700’000 MT of gas logistics which should contribute to 70 cr. of EBITDA in FY23 (@1000 EBITDA)
  • Haldia: 10% lower volumes due to upgradation of both the jetties
  • Higher other income was due to valuation of options under JV amounting to 76 cr.
  • Higher other expense was due to JV related expenses amounting to 62 cr.
  • Confident of growing earnings at 25-40% based on current assets on ground
  • On a consolidated basis, company has net cash of 600 cr.

Disclosure: Invested (position size here, no transactions in last-30 days)

  • My notes from Q1FY23 conference call

  • Launch of JV with Vopak commenced operation on 25-May

  • Kandla port operation has commenced

  • Interim Dividend - Rs. 1.5

  • LPG Volumes handled ~ 6.37 L MT at Mumbai, Pipavav and Haldia compared to ~5.67 L MT Q1’22. Despite 10% lower volume at Haldia due to Upgradations

  • Bulk distribution reported 176% growth supported by Kandla volumes. Expect increased volume to sustain in coming quarters.

  • AutoGAS sale improved 45% in volume vs Q1’22

  • Spike in other expenses about ~ 3x, JV related expenses are ~62 Cr which caused the steep increase.

  • Pipavav would LPG jetty compatible in Q3.

  • Outlook for FY23 - Liquid business and Gas business expect to be doing well

  • Kandala is operationally stabilized

  • ~1500 Cr. of cash(after taxes on 2050 Cr) on balance sheet, Consolidated debt is ~ 900 Cr. This is as a result of ~2,050 Cr is received from the Vopak deal

  • Kandla -

  • Guidance for full year from Kandla port is - 0.7 mn via distribution or through putting. Confident of 70 cr Ebita from Kandla in FY23.No current agreement with any oil company from Kandla port for through putting, yet.

  • Kandla Gorakhpur pipeline update - is being constructed would have connection to Pipavav. The allocation of 1.5 Mn. ton volume for Pipavav port. There would be similar allocation to Kandla port. The pipeline is being constructed by a third party. The LPG will be throughput to this pipeline from Pipavav and Kandla.

  • Management expect to grow business and earnings by 25-40% per annum over next few years. (when asked about - For 3-5 yrs perspective, Gas volume projections at LPG terminals from current 3 Mn.)

  • CRL terminals and Friends group terminals have put company in commanding position at Kandla port. Brings 700,000KL capacity in liquid business. Objective is to bring the margins up for these over the next period. Scope for operational efficiencies improvement in future.

  • Sourcing Business- On volumes still not at Pre-covid level, New tenders are coming out and volumes are expected to be back on track this year. Sourcing is not a big profit contributor.

  • On why AutoLPG has not grown rapidly, Presence of subsidized CNG, Company expects subsidy for CNG is not sustainable. The LPG distribution provides good margins. Difficult to do business at local level. Multi-Fuel distribution model is being built up. And dealers are able to make money. Company trying to push multi-fuel distribution rather than only Auto-LNG.


Investor presentation Q1FY23 - here

Key slide in the presentation is below

LPG import data for July 2022

Up 1% yoy and 10% qoq

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This can potentially increase the throughputs (increase wherever ports have both railway and road connectivity) of the gas terminals, although Aegis is primarily in LPG, not LNG.

Anyone else having a better understanding how this impacts Aegis, please add.

Indian Railways News: Indian Railways allows LNG transportation - The Economic Times

Aegis reported decent nos, with most growth coming from rampup in distribution business along with revival in terminalling volumes at other ports. Its interesting to see that company has achieved this growth despite no contribution from terminalling in Kandla port, and 1-month shutdown in Morbi belt. Terminalling volumes in Kandla (which was the base behind this whole stock story) will finally start this quarter, they already have 3 ships booked for this month. Will be interesting to see ramp up in volumes along with more contribution coming from industrial division. Concall notes below.

FY23Q2 concall

  • H1 LPG volumes for Mumbai, Haldia, and Pipavav was 14.70 lakh MT vs 13.05 lakh MT, increase of 13%
  • Pipavav: LPG jetty work for handling VLGC is expected to completed by Q3FY23 (extended from September 2022). Railway gantry is being used by all 3 OMCs
  • Mumbai: Operating LPG at full capacity
  • Autogas division: Quarterly volumes declined 14.8% YOY to 5’100 MTPA
  • Almost half of Morbi tile cos switched to LPG (propane) from natural gas
  • Bulk industrial volumes were 173,990 MT in H1 vs 45,816 MT last year. 35-40% was to Morbi. This was despite 1-month shutdown in Morbi
  • Commercial and domestic cylinder volumes were 17,310 MT vs 11,352 MT last year
  • Aegis makes 2,000–2,500/ton margins on bulk industrial volumes (through trucks) to Morbi customers. They make 4,000/ton margin for industrial distribution segment done through cylinders. Blended retailing margins are 3000/ton
  • Total sourcing tender volume contracts for CY22 was 800’000 MTPA. They did volumes of 457’960 MT vs 159’633 MT last year
  • H2 is generally stronger than H1
  • One-time special dividend of Rs. 2 celebrating JV transaction
  • 7 cr. profit was accrued to minority interests. Focus is on growing EPS of the company
  • LPG vs CNG in Indian context


  • No terminalling volumes yet. Started receiving ships with 3 ships being unloaded this month which will start terminalling volumes
  • Jetty 7 is expected to become VLGC-compliant by FY23 end


  • Lower volumes because of upgradation of both jetties
  • Liquids capacity of 50’000 cubic meters will be commissioned in FY23

Disclosure: Invested (position size here, no transactions in last-30 days)


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Looks like morbi is still using LPG in Q3, expect decent volumes from aegis

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Aegis reported another good set of nos with 31% growth in earnings. Kandla terminalling operations have started and management is guiding 4mn+ terminalling volumes in FY24. In addition, they have added a large number of industrial customers in retailing business. Concall notes below.

FY23Q3 concall

  • Future growth drivers: Ramp up of gas volume in Kandla, increase in gas volumes in Pipavav and Haldia due to jetty commissioning, ramp up in industrial distribution volumes from Kandla, ramp up in liquid volumes
  • Growth headwinds: Lower LPG distribution to industrial customers if LNG prices correct a lot
  • Pipavav: LPG jetty work for handling VLGC got completed and is awaiting approval for commercialization
  • Kandla: Commenced LPG handling
  • Haldia: Additional Jetty commissioned increasing unloading rates, operations have now normalized
  • Mumbai: Operating LPG at full capacity
  • Autogas division: Quarterly volumes was 5’100 MTPA (flat QoQ)
  • Commercial & industrial volumes were 151’400 MT in this quarter (vs 191’300 MT in H1FY23), huge ramp up has happened here.
  • Distribution margins will be maintained at Rs. 3000/MT
  • Total sourcing tender volume contracts for CY22 was 800’000 MTPA. They did volumes of 658’000 MT vs 286’000 MT last year
  • Additional liquid capacity of 50’000 MT will be commissioned by end of FY23
  • LPG comes from refineries or from natural gas fields. Management believes no new refinery capacities will come onstream. Some of the existing refineries (e.g. Bhatinda refinery) will be switching out of LPG to higher value products which might imply that domestic LPG supply will not increase over the next decade
  • In gas logistics division, 1mn quarterly run rate should be sustainable (did 988’000 MT this quarter). Confident of doing 4mn run rate in FY24 in logistics
  • In Morbi, 70-80% conversions have happened from LNG to LPG
  • Keshav Shenoy was made President - Strategic Planning
  • Large addition in industrial customers with a lot of new names (highlighted customers not mentioned in previous presentation)

Disclosure: Invested (position size here, sold shares in last-30 days)


Hi @harsh.beria93: with the recent price cut by Saudi Aramco; Morbi is going to be using LPG for more time it seems like… What made you book profits in this counter? the results also seemed decent, was the market expecting more? what am I missing?

Aegis reported another good set of nos with 56% growth in earnings. Real earnings are a bit lower as they had a large other income component in this quarter (something related to valuation of JV). More importantly, they have maintained their bulk industrial retail volumes at 1.3 lakh MT. Another really interesting move was their forey into JNPT, this is a significant move as JNPT handles higher volumes compared to Trombay. The other large liquid player at JNPT is Ganesh Benzoplast and they were planning to start a LPG storage unit there. Will be interesting to see how dynamics between Aegis and Ganesh plays out. Concall notes below

FY23Q4 concall

  • Pipavav: allocated 1.25mn MT in KGPL pipeline in phase I which should increase to 1.5mn MT in phase II; Phase I commissioning of pipeline is scheduled in H2 2024. Setting up a cryogenic terminal (48’000 MT) to fulfill additional demand from KGPL pipeline
  • Kandla: 70’000 MT/month utilization currently. Its an open port with HPCL and BPCL using LPG from this port
  • Haldia: Natural growth of 10-15%
  • Liquid division: 230’000 lakh kl under construction which will commercialize in FY24 and contribute in FY25. Current capacity is 1.6mn, so this will add 14% additional capacity
  • Autogas division: 4’888 MT in Q4 (vs 6’280 MT in Q4FY22; 5’100 MT in Q3)
  • Sourcing volumes: 2.73 lakh MT in Q4 (2.7 lakh MT in Q4FY22). For FY23, total sourcing volumes were 8.95 lakh MT (vs 5.56 lakh MT in FY22). Expect this growth to continue in 2023
  • Mangalore: Setting up 80’000 MT cryogenic LPG terminal (4mn MT throughput) which will be India’s biggest cryogenic LPG terminal
  • JNPT: Entry into JNPT port with 110,000 KL Liquids Terminal; to be commercialized in mid-2024. Still to be decided if it will be in Vopak JV (JV has first right to refusal)
  • Terminaling quarterly volumes were 877’000 MT (vs 988’000 last quarter). Will try to reach 4 mn MT in FY24
  • Commercial & industrial: Quarterly volumes was 136’100 MT (vs 151’400 MT in Q3; 191’300 MT in H1FY23)
  • Bulk industrial volumes were 1.31 lakh MT (vs 1.32 lakh MT in Q3; 0.45 lakh MT in Q4FY22)
  • Propane is still cheaper vs natural gas (15-20%), which should sustain with LPG price cut announced by Saudi Arabia
  • Liquid capacity is at full utilization
  • Expect 15-20% EBITDA generation on the 4500 cr. capex investment over FY22-27
  • Guidance: EPS growth of 25% (FY22 to FY27)
  • Higher other income is because of option valuation of the JV
  • Vopak gearing will be maintained at 0.6x gearing

Disclosure: Invested (position size here, no transactions in last-30 days)


Aegis reported another good quarter with highest ever distribution volumes, largely driven by bulk industrial volumes. Concall notes below.

FY24Q1 concall

  • Pipavav: First VLGC will start soon
  • Kandla: Capacity utilization is >20% and higher than expectations
  • Haldia: Operations are normal now, its a captive terminal now for HPCL
  • Liquid division: All facilities except Pipavav are running at 100% utilization
  • Sourcing volumes: 2.26 lakh MT in Q1 (2.3 lakh MT in Q1FY23)
  • Terminaling quarterly volumes were 881’000 MT (vs 637’000 in Q1FY23)
  • Commercial & industrial: Quarterly volumes was 159’000 (vs 136’100 MT in Q4FY23; 85’000 MT in Q1FY23)
  • Bulk industrial volumes were 1.44 lakh MT (vs 1.31 lakh MT in Q4FY23)
  • Capex: 1750 cr. will be in JV
  • Propane is still 20-25% cheaper than natural gas

Disclosure: Invested (position size here, sold shares in last-30 days)


Two news - Govt cuts agri cess on LPG and Gujarat Gas hikes natural gas rates by ~6%. this might benefit Aegis gas distribution volumes.