MOSL: AEGIS LOGISTICS (Buy)-Liquid utilization rises; Gas logistics to hit highs
Aegis Logistics: Liquid utilization rises; Gas logistics to hit highs
(AGIS IN, Mkt Cap USD1b, CMP INR206, TP INR245, 19% Upside, Buy)
- 3QFY20 revenues were 13% higher than est. at INR21.7b (+64% YoY), led by boost in gas business revenues (LPG logistics volumes up 68% YoY and 28% QoQ).
- According to management, AGIS is expected to see gas throughput jump ~2.0mmtpa over the next two years (on base of 2.5mmtpa in FY19).
- We remain positive on the company’s gas division and reiterate.
Provisioning for ESOP and MD commission continues
- The company has recognized ESOP expenses of INR0.4b (in addition to INR1.5b in 2QFY20), which led to EBITDA miss of 18% at INR1.1b (v/s gain of INR0.9b in 3QFY19). Adjusting for the ESOP, EBITDA was 14% higher than est. at INR1.5b.
- The company has also taken INR20m provision for commissions to the Managing Director (totaling to INR60m for 9MFY20) in other expenses.
- AGIS has reported higher interest expense, which was offset by higher other income. PBT for the quarter came in at INR0.9b (v/s gain of INR0.7b in 3QFY19). Adj. PBT for ESOP PBT stood at INR1.3b (18% above est.).
- Tax rate for the quarter stood at 32.4% with PAT at INR0.4b (v/s gain of INR0.6b in 3QFY19 and loss of INR0.4b in 2QFY20).
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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