In Q2FY14, Aegis Logistics Ltd. (Aegis) reported numbers in line with our expectations. The
revenue was up by 77.3% YoY to Rs 1,562.9 crore led by a record revenue from the liquid division
and an increase in the LPG gas sourcing volumes. On a comparative basis, profit from operations
was at Rs 27.8 crore as compared to a loss of Rs 48.9 crore in Q2FY13, largely due to an increase
in the high margin liquid division segment and a change in the hedging strategy. The PAT was
down by 43.9% YoY to Rs 20.7 crore compared to Rs 36.9 crore, due to a higher other income of Rs109.9 crore, which includes interest income of Rs 58.4 crore. In FY13, due to exotic option
contracts Aegis had a gross debt of Rs 2,707 crore with cash and equivalents of Rs 2,514 crore, but the unwinding of the option contracts brought debt to normal levels of Rs 238 crore in H1FY14.
revenue was up by 77.3% YoY to Rs 1,562.9 crore led by a record revenue from the liquid division
and an increase in the LPG gas sourcing volumes. On a comparative basis, profit from operations
was at Rs 27.8 crore as compared to a loss of Rs 48.9 crore in Q2FY13, largely due to an increase
in the high margin liquid division segment and a change in the hedging strategy. The PAT was
down by 43.9% YoY to Rs 20.7 crore compared to Rs 36.9 crore, due to a higher other income of Rs109.9 crore, which includes interest income of Rs 58.4 crore. In FY13, due to exotic option
contracts Aegis had a gross debt of Rs 2,707 crore with cash and equivalents of Rs 2,514 crore, but the unwinding of the option contracts brought debt to normal levels of Rs 238 crore in H1FY14.
The Liquid division revenue at Rs 34 crore is the highest quarterly revenue clocked by Aegis. The
increase in revenue was led by the increase in capacity due to de-bottlenecking at the Mumbai
facility and a change in the liquid mix. The EDITDA came in at Rs 22.5 crore with a margin of 66.2%,mainly on accounts of a change in the liquid mix, which now has a higher share of specialty
chemicals. With the expansion plan in place at the Haldia and Pipavav facilities and incremental
utilization at the Kochi facility (fire fighting mechanism issue resolved by the port authorities),
Aegis is looking at higher revenues from this division over the forecast period.
Gas Division:
The gas division revenue stood at Rs 1,529 crore with an EBITDA of Rs 15.2 crore. The increase inrevenue was mainly due to an increase in the low margin gas sourcing business (~255,000 MT).
The growth in the higher margin gas distribution business (12,500 MT) was tepid due to a lower
number of gas stations getting sanctioned (94 stations) and a low off-take in the commercial
business due to the sluggish economy. With an increase in LPG imports by India (~7 mn MT) and
more auto gas stations and distributors for commercial and industrial gas getting sanctioned, this
segment is likely to perform well in the coming quarters.
The growth in the higher margin gas distribution business (12,500 MT) was tepid due to a lower
number of gas stations getting sanctioned (94 stations) and a low off-take in the commercial
business due to the sluggish economy. With an increase in LPG imports by India (~7 mn MT) and
more auto gas stations and distributors for commercial and industrial gas getting sanctioned, this
segment is likely to perform well in the coming quarters.
EXPECTING 22 EPS FOR FULL YEAR AND COMPANY GOING TO BE DEBIT FREE THIS YEAR. BUY ON EVERY DIP ONE CAN EXPECT 250 RS IN NEXT SIX MONTHS
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