Buy Aegis Logistics; target of Rs 400: Motilal Oswal
Motilal Oswal is bullish on Aegis Logistics recommended buy rating on the stock with a target price of Rs 400 in its research report dated May 29, 2021.
June 01, 2021 / 01:05 PM IST
Motilal Oswal's research report on Aegis Logistics
Aegis Logistics (AGIS) reported a miss on our estimates, primarily due to a drop in the Gas business, while the Liquids business performed robustly. The Gas Logistics business was impacted as AGIS reported a shift in BPCL volumes from its Haldia LPG terminal to its recently commissioned terminal. Aegis clocked higher movement of LPG wagons at its Pipavav railway gantry and signed BPCL as a second customer (apart from IOCL). The Mumbai LPG terminal is operating at the maximum level since Dec’20. The Liquids business saw margin expansion in 4Q with the handling of higher margin products. The Mangalore (+50,000kl) and Haldia (+54,000kl) liquid terminals are expected to be commissioned in 1QFY22; Kochi (+20,000kl) is expected to be commissioned in 2HFY22. These expansions are likely to result in better margins as well, as capacity has already been presold (unlike in the past).
AGIS trades at 25.5x FY23E EPS of INR13.3 and 15.0x FY23E EV/EBITDA. We value AGIS using the DCF methodology to arrive at a fair value of INR400/share. Maintain Buy.
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