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Motilal Oswal Report
Aegis Logistics Ltd. reported a higher-than-estimated Ebitda of Rs 2.2 billion (our estimate: Rs 1.6 billion; up 45% YoY/28% QoQ) primarily driven by 19% QoQ growth in liquefied petroleum gas throughput. Management expects ~1 metric million tonne of quarterly LPG throughput going forward led by ramp-ups in Haldia and Kandla terminals.
Aegis expects domestic LPG production to remain stagnant considering no new refineries are likely to be built in the country. Additionally, a few of the existing refineries are also reducing LPG production in favor of other value-added products.
Management also expects a strong ~30-40% growth in distribution volumes as industrial clusters are likely to switch to cleaner fuels such as LPG/Propane.
A capex program of Rs 25-45 billion has been planned for the joint venture over the next four years, which would be funded via internal accruals, debt, and some cash injection by both shareholders.
However, such a high and ambitious capex will burden Aegis' balance sheet, with the focus shifting away from the LPG business that may elevate uncertainty.
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