Aegis Logistics Limited — Q2 FY25 earnings call

Call held 19 Nov 2024

Management summary

Aegis Logistics delivered its highest-ever half-yearly performance in H1 FY25, characterized by record EBITDA and PAT growth across both its Liquids and LPG divisions. The company is aggressively executing a ₹4,500 crore capex plan, with significant capacity expansions in LPG and liquids nearing completion. Management remains confident in achieving a 25% CAGR through FY27, supported by new projects in ammonia and a strategic IPO for its Vopak JV.

Highlights

  • Achieved record consolidated normalized EBITDA of ₹487 crores in H1 FY25, up 10% YoY.

  • Profit After Tax (PAT) increased by 10% YoY to ₹310 crores for the half-year period.

  • Liquids division reported a 27% YoY increase in EBITDA to ₹201 crores, driven by new capacities.

  • LPG logistics throughput volumes grew 9% YoY to 2.08 million metric tonnes.

  • Total Capex program of ₹4,500 crores by FY27 is approximately 50% complete or in progress.

  • Announced a new standalone liquid storage terminal in Mumbai with 150,000 kL capacity at a cost of ₹250 crores.

  • Aegis-Vopak Terminals Limited (AVTL) subsidiary filed a DRHP for an IPO to reduce debt and fund growth.

  • Secured an anchor customer commitment for the upcoming 25,000 metric tonne ammonia terminal in Pipavav.

Key financials

  1. Consolidated Normalized EBITDA ₹487 Cr +10%YoY
  2. Profit After Tax ₹310 Cr +10%YoY
  3. Earnings Per Share ₹7.33 +6%YoY
  4. LPG Logistics Throughput 2.08 million metric tonnes +9%YoY

What they filed

Q1 FY27: revenue up 27.7%, net profit up 471.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue658 672 914 837 1,028 +56%914 +36%1,713 +87%1,069 +28%
EBITDA67 63 246 67 79 +18%89 +41%416 +69%469 +600%
Net profit72 66 226 69 167 +132%183 +177%524 +132%394 +471%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of EBITDA
₹487 Cr Total
  • LPG Business ₹286 Cr 58.7%
  • Liquids Business ₹201 Cr 41.3%

Guidance & targets

Profitability

  • Average CAGR Growth Profitability · FY22 to FY27 · High confidence 25%
    we are very confident that in the five years period from FY22 to FY27... we would be in a position to achieve an average CAGR growth of 25%.

    — Murad Moledina, CFO

Capex

  • Total Capital Expenditure Program Capex · by FY27 · High confidence ₹4,500 crores
    Out of the total capital expenditure program of Rs. 4,500 crores by FY27, approximately already 50% is complete and or currently in progress.

    — Raj Chandaria, Chairman & MD

Capacity

  • LPG Storage Capacity Expansion Capacity · by end of fiscal 2025 · High confidence 130,000 metric tonnes
    Our ongoing capacity expansion at New Mangalore in Karnataka and Pipavav in Gujarat is expected to increase our LPG storage capacity by 130,000 metric tonnes by the end of fiscal 2025.

    — Raj Chandaria, Chairman & MD

  • Mumbai Liquid Storage Terminal Capacity · next 1-2 years · Medium confidence 150,000 kL
    we plan to build a storage terminal with capacity of approximately 150,000 kL on this site with an estimated project cost of around Rs. 250 crores.

    — Raj Chandaria, Chairman & MD

Margin

  • Ammonia EBITDA Margin Margin · FY26 · Medium confidence 90%
    EBITDA margins are similar, around 90%. And that is the way it is.

    — Murad Moledina, CFO

Risks & concerns

  • Competition from Natural Gas/CNG

    medium

    Potential impact on LPG distribution volumes if CNG prices remain lower; management notes LPG is currently 10-20% cheaper but fuel competition is constant.

    Analyst acknowledged

  • Execution Risk of Large Capex

    medium

    The company is managing a massive ₹4,500 crore capex program; delays in permits or construction could impact the 25% CAGR guidance.

    Management acknowledged

  • Sourcing Volume Decline

    low

    Sourcing volumes fell from 400k to 318k tonnes; management claims this segment has slim margins and does not significantly impact EBITDA.

    Analyst downplayed

Areas of evasion (3)

  • Specific post-IPO stake in AVTL
  • Hydrogen capacity filing details
  • Detailed impact of IPO on current shareholders

Q&A highlights

2 direct, 1 evasive
Mumbai Liquid Storage Expansion Structure Direct
Will be standalone.

Clarifies that the new ₹250 crore Mumbai expansion will be 100% owned by Aegis Logistics rather than being part of the Vopak JV.

Asked by Vikram Suryavanshi

Ammonia Business Unit Economics Direct
The turnaround is not as much as LPG but the rates are higher for the throughput... generally are 2.5x to 3x the rate of LPG throughput.

Reveals that while ammonia has lower asset turns than LPG, its significantly higher pricing and 90% EBITDA margins make it a high-value segment.

Asked by Vikram Suryavanshi

AVTL IPO and Shareholder Impact Evasive
We have just filed the DRHP today and we will discuss more in the coming quarter... we are not at liberty to talk as of now.

Management declined to provide specific details on post-IPO stake or dilution, citing the recent DRHP filing, leaving uncertainty regarding the exact impact on Aegis Logistics shareholders.

Asked by Kumar Saurabh

2 min read 5 chapters

Detailed narrative

Record Financial Performance and Growth

Aegis Logistics reported a record H1 FY25 with consolidated normalized EBITDA reaching ₹487 crores, a 10% increase year-on-year. Profit After Tax also grew by 10% to ₹310 crores, with EPS rising to ₹7.33. The growth was broad-based, with the Liquids division seeing a 27% EBITDA surge to ₹201 crores and the LPG division delivering its highest-ever H1 EBITDA of ₹286 crores.

Aggressive Infrastructure Expansion Strategy

The company is halfway through a massive ₹4,500 crore capex program aimed at completion by FY27. Key projects include a 130,000 metric tonne LPG storage expansion at Mangalore and Pipavav, expected to be online by the end of FY25. Additionally, a new 150,000 kL standalone liquid terminal in Mumbai was announced with an estimated cost of ₹250 crores, further strengthening Aegis's port-led logistics dominance.

Strategic Pivot to Ammonia and Sustainable Fuels

Aegis is diversifying into ammonia terminaling with a 25,000 metric tonne facility in Pipavav, Gujarat. Management revealed that ammonia offers 2.5x to 3x the revenue rates of LPG throughput with high EBITDA margins of approximately 90%. The project has already secured an anchor customer commitment, signaling strong market demand as India transitions toward cleaner energy sources.

Aegis-Vopak Terminals (AVTL) IPO Filing

A significant corporate development is the filing of a Draft Red Herring Prospectus (DRHP) for an IPO of the Aegis-Vopak Terminals Limited subsidiary. The proceeds are intended to reduce outstanding debt and fund general corporate purposes. While management was tight-lipped on specific dilution details due to regulatory restrictions, they emphasized that the reduction in interest costs would help compensate for the increase in minority interest.

LPG Logistics and Pipeline Integration

LPG logistics throughput volumes reached 2.08 million metric tonnes in H1 FY25, a 9% increase. The upcoming Kandla-Gorakhpur pipeline, expected to be commissioned by mid-2025, is anticipated to further boost volumes. Despite a slight decline in distribution and sourcing volumes, management remains focused on high-margin logistics throughput, which remains the primary driver of EBITDA.

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