MOSL: AEGIS LOGISTICS (Buy)-EBITDA marginally below estimate; Haldia ramp-up on track
Aegis Logistics: EBITDA marginally below estimate; Haldia ramp-up on track
(AGIS IN, Mkt Cap USD1.1b, CMP INR235, TP INR311, 32% Upside, Buy)
- AGIS' 1QFY19 reported EBITDA of INR864m (+53% YoY, +24% QoQ) was marginally below our estimate of INR910m, led by a weak performance of the liquid terminal division. PAT increased 17% YoY (+7% QoQ) to INR516m, lower than our estimate of INR564m due to higher interest cost of INR65m (est. of INR36m; +94% YoY, +83% QoQ) and higher-than-expected minority interest.
- Gas division EBITDA increased 59% YoY (+15% QoQ) to INR620m in 1QFY19. While logistics volumes were up 91% YoY (+19% QoQ) to 576kmt, sourcing volumes declined 7% YoY (-24% QoQ) to 216kmt and distribution volumes grew 21% YoY (+2% QoQ) to 21.8kmt. Logistics volume growth is likely to remain strong, led by ramp-up of the Haldia and Pipavav terminals.
- Liquids division EBITDA grew 4% YoY (+20% QoQ) to INR20m in 1QFY19. While Mumbai, Kochi and Haldia are operating at full capacity, Pipavav is operating at ~25% utilization. Profitability during the quarter was impacted by a shift in the product mix. Kandla, Mangalore and Haldia terminals are expected to start contributing to revenue from 3QFY19.
Aegis Logistics Limited is a holding company, which is engaged in providing logistics and supply chain services to the oil, gas and chemical industry. The Company is engaged in the sale of liquefied petroleum gas (LPG), wholesale of solid, liquid and gaseous fuels and related products, and storage and warehousing of products, such as general merchandise warehouses and warehousing of furniture, automobiles, gas and oil, chemicals and textiles. Its segments include Liquid Terminal Division and Gas Terminal Division. The Liquid Terminal Division undertakes storage and terminaling facility of oil and chemical products. Its Gas Terminal Division relates to imports, storage and distribution of petroleum products, such as LPG and propane. It markets LPG packed in cylinders, which are used for domestic, commercial and industrial applications. It operates a network of filling plants, distribution points and dealers under the Aegis Puregas brand.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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