- Jefferies downgraded Aegis Vopak to Hold from Buy despite raising price target to Rs 280
- Aegis Vopak's Q1 EBITDA beat estimates by 14%, driven by a 31% revenue rise in liquids segment
- The LPG division handled 32% of India's LPG imports amid a 45% YoY national import decline
Global brokerage firm Jefferies has downgraded liquid and gas logistics operator Aegis Vopak to a 'Hold' rating from a 'Buy', even as it raised its price target on the stock to Rs 280 from Rs 240.
The rating downgrade comes primarily on the back of sharp valuation rerating, following a substantial 35% outperformance against the benchmark Nifty index since June, which analysts believe leaves limited room for near-term upside.
Robust Q1 Performance Outpaces Street Estimates
Aegis Vopak delivered strong operational results in the first quarter, with EBITDA beating consensus estimates by 14%. The outperformance was largely powered by the liquids segment, which saw a 31% year-on-year (YoY) revenue jump driven by robust volume ramp-up at its Jawaharlal Nehru Port Authority (JNPA) terminal.
In its gas logistics division, the joint venture demonstrated strong market resilience:
- Market Leadership in LPG: Handled 32% of India's total LPG imports during the quarter.
- Resilience Against Macro Headwinds: Maintained high throughput share despite a sharp 45% YoY contraction in aggregate national LPG import volumes.
Aggressive Capex and Strong Growth Pipeline
Beyond quarterly numbers, Jefferies highlighted that Aegis Vopak's multi-year capacity expansion blueprint remains firmly on track:
Jefferies on Aegis Vopak
Valuation Multiple Caps Further Upside
Despite sound underlying business fundamentals and robust medium-term growth visibility, Jefferies noted that current market pricing adequately reflects these positives.
The stock currently trades at 33x September-2027 estimated EV/EBITDA. Following the recent rally and outperformance relative to broader market indices, the brokerage cautioned that current valuations provide limited margin of safety, prompting the downgrade to a neutral stance.
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