Aegis Logistics Q3 Results Review - Outlook Intact Amid Stable Performance: Motilal Oswal

Motilal Oswal Report

Aegis Logistics Ltd. reported in line Ebitda of Rs 2.1 billion normalised Ebitda for the liquids division increased 10% YoY to Rs 850 million, while that of the gas division declined 10% YoY to Rs 1,470 million.

The company is focusing on setting up bottling plants right outside its terminals as it provides competitive advantage to Aegis Logistics to cater to small and medium-sized enterprises customers (in gas distribution segment) within 350-400 kilometer.

The company is also working on technical breakthroughs to implement liquified petroleum gas as a fuel source for large diesel generators. This is driven by the potential for LPG to generate an equivalent amount of electricity at only a quarter of the cost of diesel.

Additionally, competition from oil marketing companies as well as private players make the ramp-ups in LPG throughput challenging, and hence, we reiterate our 'Neutral' rating on the stock.

The stock currently trades at 23.9 times FY25E earning per share of Rs 15.7. We value the stock at 22 times December- 25E EPS of Rs 15.7 to arrive at our target price of Rs 345.

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