Aegis Logistics - Can It Be Exception?

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)