Aegis Logistics Q1 Results Review - Volume Growth In Focus; Mumbai Terminal Announced: Motilal Oswal

Motilal Oswal Report

Aegis Logistics Ltd. reported Ebitda of Rs 2.3 billion in Q1 FY25 (6% miss), up 19% YoY, mainly aided by strong Ebit growth of 29% YoY for the liquids division.

Aegis Logistics announced its plan to build a 150,000kl storage terminal at Mumbai with an investment of Rs 52.5 billion. This is in addition to the ongoing aggressive capacity expansion in the liquids and gas divisions.

Other key takeaways:

1. The management re-iterated its growth guidance of 25%-30% compound annual growth rate over the next three years, primarily led by robust upcoming capacities;

2. capex rate of Rs 10 billion p.a. until FY27 and beyond (versus Rs 9 billion previously guided).

We estimate a 16% compound annual growth rate in earning per share over FY24-26. However, the current valuations at FY26E price to earning of 39 times and price to book of 6.2 times (FY26 return on equity: 17%) are no longer inexpensive.

Hence, we maintain our 'Neutral' rating on the stock with a target price of Rs 760, based on 35 times FY26E earning per share of Rs 22.

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