Motilal Oswal's research report on Aegis Logistics
AGIS reported in line EBITDA (at INR1.2b), driven by resilient performance in the liquids division, and revival in gas sourcing and the logistics business. n Commissioning of Railway gantry at Pipavav in Dec’20 combined with expected work on the port to make it compatible for VLGC (Very Large Gas Carriers) is expected to add incremental throughput (of ~0.5mmtpa) over the next 3- 4 quarters. n All necessary debottlenecking of the Uran Chakkan pipeline have been completed in Dec’20. Mumbai LPG terminal has seen higher offtake in Jan’21, with volumes set to increase in coming months. n Kandla LPG terminal and three liquids terminal expansions (at Mangalore, Haldia, and Kochi) would be completed as per schedule in 4QFY21. n The management expects incremental gas logistics volumes of 1.8-2mmtpa over the next 2-3 years (with ramping up of throughput at Mumbai and Pipavav, and commissioning of Kandla). This enhancement is expected to help the company ramp up its domestic market share.
Outlook
We value AGIS using the DCF methodology to arrive at a fair value of INR330 per share. Maintain Buy.
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