Aegis Logistics Q1 FY27 earnings call

Aegis Logistics reported a stellar Q1 FY27, with Profit After Tax soaring 212% year-on-year to ₹500 crores, and Normalized EBITDA increasing 184% year-on-year to ₹727 crores. This strong performance was largely propelled by the Gas division, which achieved its highest ever EBITDA, growing 296% year-on-year. The Gas distribution business saw a significant 91% year-on-year increase in volumes, reaching 2.77 lakh metric tons, and a 19% sequential growth over Q4 FY26, despite a challenging global environment.

The company is actively expanding its infrastructure across multiple strategic ports. At Mumbai Port, an additional 64,000 cubic meters of liquid storage is under development with a ₹125 crore investment, slated for commissioning in H1 FY27. JNPA is undergoing a major expansion with a total capital outlay of ₹1,675 crores, adding approximately 318,100 cubic meters of liquid storage and 77,236 metric tons of LPG capacity, with the first phase of liquid storage expected in Q3 FY27. Additionally, a 52,000 metric ton refrigerated double-walled steel LPG tank has been approved for JNPA.

Pipavav is set to become a transformational hub with several infrastructure improvements. The VLGC-compliant liquids jetty is expected to be completed this year, enhancing vessel handling. An additional liquid rail gantry has secured a 15-year take-or-pay agreement for petroleum products, with operations commencing by year-end, exceeding 0.5 million metric tons per annum. The specialized ammonia storage and terminaling facility with 36,000 metric tons capacity has been commissioned, backed by a 15-year take-or-pay agreement with Hindustan Zinc.

Management highlighted that the distribution margin, which historically stood at ₹4,000 per ton until FY25, is now sustainable at ₹7,000 per ton or more. This improvement is attributed to procurement efficiencies gained from increased volumes, enabling the use of larger gas carriers with significantly lower freight costs (e.g., $15 vs $50). This structural shift is expected to maintain higher margins even as geopolitical uncertainties normalize.

Aegis Logistics maintains a strong financial position with liquidity reserves exceeding ₹5,940 crores. The company's cumulative capex is projected to reach approximately $1.2 billion this fiscal year, with an identified pipeline of $5 billion through FY2030-31. Funding for these expansions is planned through a balanced mix of equity, internal accruals, and debt, targeting a gearing ratio of approximately 0.6. The company emphasizes a disciplined approach to capital allocation, prioritizing profitable growth.

The partnership with ITOCHU Corporation was highlighted as a significant strategic move. ITOCHU has acquired a 10% stake in Aegis Terminal Pipavav Limited and expressed an intention to increase its stake to 25% over the next three years. This collaboration is seen as a validation of the long-term potential of the Pipavav asset and strengthens Aegis's position in the energy transition opportunities.