MOSL: AEGIS LOGISTICS (Buy)-Key beneficiary of increasing LPG penetration in India
Aegis Logistics: Key beneficiary of increasing LPG penetration in India
(AGIS IN, Mkt Cap USD1b, CMP INR200, TP INR262, 31% Upside, Buy)
Aegis Logistics (AGIS IN) is a key beneficiary of the government’s thrust on increasing penetration of LPG in India. We recently met AGIS’ management; key highlights from the meeting:
Beneficiary of LPG import growth
- LPG demand in India is expected to increase from ~23mmt in FY19 to ~40mmt in FY35 (a conservative estimate) due to
(a) increased LPG penetration in the country,
(b) rise in average consumption per household, and
(c) growing urbanization.
- AGIS handled ~2.52mmt (19%) of the total ~13.2mmt (FY19) LPG imports in India. LPG imports are expected to see CAGR of ~6-7% over FY20-35.
- The company plans to increase its market share to ~33% by creating a network of terminals; these will focus on
(a) congestion free ports with increase in throughput (turns),
(b) possibility of anchoring Very Large Gas Carriers (VLGCs), and
(c) adequate storage capacity and proper evacuation facility.
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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