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Buy Aegis Logistics; target of Rs 245: Motilal Oswal

Motilal Oswal is bullish on Aegis Logistics has recommended buy rating on the stock with a target price of Rs 245 in its research report dated June 23, 2020.

June 25, 2020 / 08:26 IST
     
     
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    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.


    For all recommendations report, click here

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    Broker Research
    first published: Jun 25, 2020 08:26 am

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