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)