Motilal Oswal 's research report on Aegis Logistics
Higher-than-estimated other expenditure, combined with lower LPG throughput, led to an EBITDA miss during the quarter. Due to COVID-19-led lockdown, LPG logistics volumes were down 24% QoQ (up by a mere 3% YoY). The company kept LPG terminals operational during lockdown to fulfill higher LPG demand. Despite the impact of the shutdown witnessed in the quarter, LPG distribution volumes were up 13% QoQ (+49% YoY), primarily aided by a surge in LPG cylinder volumes (45% YoY) and LPG industrial volumes (+66% YoY). This was supported by expansion in the company’s distribution network. For FY20, the company recorded LPG logistics volumes growth of 20% YoY, and LPG distribution volumes growth was up 44% YoY. According to management, due to economic slowdown, expect the Liquids segment’s volume to be flattish YoY in FY21. On the other hand, expect a boost in gas volumes in 2HFY21 from the Uran-Chakan pipeline and Pipavav Railway Gantry.
Outlook
With some minimal delay in project developments led by nationwide lockdowns, the company is still expected to see gas throughput jump ~1.0mmtpa over the next two years (on base of 3.0mmtpa in FY20). We remain positive on the company’s Gas division and reiterate Buy.
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