MOSL: AEGIS LOGISTICS (Buy)-Strong volume growth, PAT in line with expectations
Aegis Logistics: Strong volume growth, PAT in line with expectations
(AGIS IN, Mkt Cap USD0.9b, CMP INR199, TP INR277, 39% Upside, Buy)
Return ratios to improve
- AGIS’ EBITDA increased 29% YoY (+4% QoQ) to INR926m, below our estimate of INR1,015m due to weak performance of the Gas division. PAT increased 10% YoY (+21% QoQ) to INR591m, in line with our estimate of INR587m.
- Liquid division EBITDA increased 2% YoY (+19 % QoQ) to INR250m in 3QFY19. Profitability increased due to higher throughput from the Kandla and Haldia terminals, which became fully functional in 3QFY19.
- Gas EBITDA grew 31% YoY (-3% QoQ) to INR780m in 3QFY19. Logistics volumes were up 5% YoY (-14% QoQ) to 572kmt, sourcing volumes declined 11% YoY (+1% QoQ) to 273kmt and distribution volumes increased 59% YoY (+18% QoQ) to 33.5kmt.
- Effective tax rate was lower at 14% due to tax adjustment for earlier years.
- For 9MFY19, EPS stood at INR4.8. For FY19, we estimate an EPS of INR6.7.
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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