Aegis Logistics Q4 Review - Throughput Declines But Management Optimistic In The Near Term: Motilal Oswal

Motilal Oswal Report

Aegis Logistics Ltd. reported a lower-than-estimated Ebida of Rs 2.0 billion (our estimate: Rs 2.3 billion; up 42% YoY, down 6% QoQ) due to lower volumes in Q4 FY23.

Gas division posted 88% YoY revenue growth in FY23 driven primarily by 61% YoY growth in sourcing volume. However, management highlighted that the sourcing division contributes very little to Ebitda due to its slender margin of ~$1/million tonne.

Although LPG terminalling throughput declined 11% QoQ in Q4 FY23, management expects throughput to reach ~4 million metric tonne in FY24 from ~3.3 mmt in FY23 driven by ramp-up of Kandla terminal. The Kandla terminal’s exit runrate throughput stood at around 70,000 mt/month at end-Q4 FY23.

A capex program of Rs 45 billion has been planned for the joint venture over 2023-2027, which would be funded via internal accruals, debt, and some cash injection by both shareholders. However, such a high and ambitious capex will burden Aegis Logistics’ balance sheet, with the focus shifting away from the LPG business that may elevate uncertainty.

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