Aegis Logistics Q2 Results Review - Outlook Intact Amid Stable Performance: Motilal Oswal

Motilal Oswal Report

Aegis Logistics Ltd. reported in-line Ebitda of Rs 2.1 billion, though its revenue was down 43% YoY due to reduced sourcing volumes and lower liquefied petroleum gas prices in Q2 FY24. However, management does not expect any significant impact of this on the company’s profit level.

Throughput volumes surpassed the milestone of 1 million metric tonne in a single quarter for the first time in Q2 FY24. Management expects throughput volumes to grow 20% YoY in FY24 driven by the ramp-up of Kandla terminal.

A capex program of Rs 45 billion has been planned for the joint venture over 2023-27, which would be funded via internal accruals, debt, and some cash injections by shareholders.

However, such a high and ambitious capex will burden Aegis Logistics’ balance sheet, with the focus shifting away from the LPG business, which may elevate uncertainty.

Additionally, competition from oil marketing companies as well as private players makes the ramp-up in LPG throughput challenging.

The stock currently trades at 19.5 times FY25E earnings per share of Rs 14.5.

We value the stock at 22 times FY25E EPS to arrive at our target price of Rs 320.

We maintain our 'Neutral' rating on the stock.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.