Sushil Finance is bullish on Aegis Logistics and has recommended buy rating on the stock with a price taget of Rs 205 in its August 06, 2013 research report.
Sushil Finance's research report on Aegis Logistics
"Aegis Logistics has commissioned phase 1 of Haldia of 15,000 KL which is already running at 100 percent capacity utilization. The remaining 45,000 KL is likely to be commissioned by end of Q2FY13 at a total capex of Rs.480 Mn of which the company has already spent Rs.410 Mn till June'13. It has also commenced work at Pipavav for a 120,000 KL facility with a total capex of Rs.1010 Mn of which it has already incurred Rs.197Mn till June'13. This project is likely to get commissioned by FY15. Post this expansion the company's liquid division's capacity is likely to increase to 504,000 KL from the current 339,000 KL."
"The Company is also increasing its gas division's capacity by 10 percent to 25,400 MT which translates into a handling capacity of 850,000 MT from current 750,000 MT at a capex of Rs.220 Mn. It is also widening its reach in the B2C segment with number of operational autogas stations at 94 from 80 in FY12. It also plans to add another 41 autogas stations by the end of FY15 and additional 35 Commercial & Industrial distributors vs current 45."
"We strongly believe that Aegis Logistics, India's leading oil, gas, and chemical logistics company, is likely to be in a sweet spot from FY14E due to spurt in volume from the high margin business - Liquid division post expansion and Retail Autogas and Commercial cylinder business due to - cap on subsidized cylinders and network expansion. Also, with the expiry of the options contract in Mar'13, the volatility in earnings is also likely to reduce considerably which is visible in Q1FY14 numbers. However, revenue is likely to grow at a slower pace of 6 percent in FY14 as its wholesale low margin gas business is witnessing short term blip because of lower offtake from National Oil Companies. The stock currently trades at 4.7x and 3.1x its FY14E and FY15E EPS. We thus continue to maintain our positive outlook on the company with a BUY rating and a target price of Rs 205," says Sushil Finance research report.
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