Motilal Oswal is bullish on Aegis Logistics has recommended buy rating on the stock with a target price of Rs 277 in its research report dated February 01, 2019.
Motilal Oswal's research report on Aegis Logistics
AGIS’ EBITDA increased 29% YoY (+4% QoQ) to INR926m, below our estimate of INR1,015m due to weak performance of the Gas division. PAT increased 10% YoY (+21% QoQ) to INR591m, in line with our estimate of INR587m. Liquid division EBITDA increased 2% YoY (+19 % QoQ) to INR250m in 3QFY19. Profitability increased due to higher throughput from the Kandla and Haldia terminals, which became fully functional in 3QFY19. Gas EBITDA grew 31% YoY (-3% QoQ) to INR780m in 3QFY19. Logistics volumes were up 5% YoY (-14% QoQ) to 572kmt, sourcing volumes declined 11% YoY (+1% QoQ) to 273kmt and distribution volumes increased 59% YoY (+18% QoQ) to 33.5kmt. Effective tax rate was lower at 14% due to tax adjustment for earlier years. For 9MFY19, EPS stood at INR4.8. For FY19, we estimate an EPS of INR6.7.
We value AGIS using the DCF methodology, with WACC of 11.4% and terminal growth of 3.5%, to arrive at a fair value of INR277/share (39% upside). AGIS trades at 19.4x FY20E EPS of INR9.8 and 11.6x FY20E EV/EBITDA. Maintain Buy.
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