Aegis Logistics share: Discover 10 factors for long-term investment

Aegis Logistics share

Aegis Logistics share – Company Overview:

Aegis logistics share – Headquarter in Mumbai, India, the company is a leading company in the oil, gas, and chemical logistics segment. Aegis Logistics Ltd. was incorporated in the year 1956 and became a publicly listed company in the year 1978. The company is a part of Aegis group which operates in bulk liquid handling terminals, liquefied petroleum gas (LPG) terminals, filling plants, pipelines, and gas stations.

  • Aegis Logistics Ltd. Company Overview
    • The company has four Gas divisions in India – Haldia, Mumbai, Pipavav, and Kandla.
    • Aegis Logistics operates in liquid logistics, gas logistics, chemical logistics, EPC Services, Retail LPG, and marine services and is present in Mumbai Port, Kochi Port, and Pipapav Port.
    • The company is an integrated supply chain service provider from LPG sourcing to distribution through gas stations.
    • Aegis Logistics is also setting up a new facility at Haldia on the Eastern Coast.
    • The company owns and operates a 20,000 MT fully refrigerated LPG import terminal while international operations are handled through its sourcing and trading subsidiaries located in Singapore.
    • On 13, July 2021 the company announced a joint venture with Royal Vopak, a leading independent tank storage company headquartered in Rotterdam, the Netherlands.
    • The company is one of the largest independent tank storage companies for LPG and chemicals in India.
    • As per the latest investor presentation, Aegis Logistics secured international sourcing tenders for LPG from National Oil Company for the calendar year 2022 for 18 VLGC aggregating to ~ 800,000 metric tons.
    • Aegis Logistics Ltd. has a strong CAPEX plan of INR 1250 crores, and proposes as per the business plan with Vopak, to proceed with a 5 Capex Plan out of 12 agreed with Royal Vopak.
    • Within the Capex plan, Aegis Logistics proposes to set up Liquid and Gas Terminaling facilities at Pipavav, Haldia, Mangalore, and Kochi.
    • It is proposed to add 175,000-kilo liters of liquid storage capacity and 100,000 MT of gas storage capacity, eventually in Aegis Vopak Terminals Limited (AVTL).
    • Aegis Logistics Ltd. signed a 10 + 15 years contract for the use of 21,000-kilo liters of petroleum storage at Kochi with Shell.
    • The government of India announced the National Logistics Policy which is supportive of all logistics companies.
    • Looking at the current scenario of the oil and gas industry globally and domestically, along with the new National Logistics Policy, Aegis Logistics company will benefit further from these developments.

 Aegis Logistics share – Company Financial Overview

The Revenue of Aegis logistics was reported to decline by 46.49% to INR 3843 crores in the year 2020-21 from INR 7183 crores in 2019-20 due to lower sourcing volumes. However, the business again picks up after the pandemic, and the company reported INR 4630 crores of revenue in FY 2022 which is about 25% growth over the previous period.

Despite the slowdown of business during the Covid pandemic, the net profit recorded a growth of over 87% for FY 2021 to reach INR 249 crores as against INR 133 crores in the previous year. The Profit further went up by over 54% for FY 2022 to reach INR 384 crores. EPS also jumped from 2.94 in FY 2020 to 10.19 in 2022 and it is almost double. This is a very good stock to keep in the portfolio for the long term.

Aegis Logistics share – Company Valuation parameters

Aegis Logistics is a Mid-cap company with a market cap of INR 9168 crores with a face value of INR 1 per equity share. The return on capital employed (RoCE) of the company is 17.4% and return on equity is 16.4% FY 2022.  Earnings per share (EPS) increased over 4 times from 2.94 in FY 2020 to 10.19 in FY 2022. A zero-debt company with a debt-to-equity ratio of 0.18 in FY 2022.

Promoters have not changed their holdings and remain the same at 58.07% over the last year that ended June 2022. DII has increased its stake in the company from 0.93% in December 2021 to 2.35% in June 2022. However, FII holdings in the company slightly reduced from 15.52% in December 2021 to 15.11% in June 2022.

The government of India has announced the National Logistic Policy intending to reduce the cost of logistics to below 10% from currently 14% of GDP. This will further boost exports while reducing the cost of the products domestically. To make India a manufacturing hub, the country needs a strong logistic sector along with other infrastructure. Aegis logistics company is focusing on higher Capex, expanding through both organic and inorganic ways that will further boost the EPS of the company in the next financial year.

Aegis Logistics Company Promoters and Management

Aegis Logistics Ltd. Runs by a strong and experienced management team. Mr. Raj Chandaria is the Chairman and Managing director of the company. He has been associated with the company since December 2008. He holds a Master in Business Administration degree from Questrom School of Business, Boston University.

Mr. Sudhir Malhotra is the Chief Executive Officer of the company. He has been associated with the company for 32 years, since August 1990.

Recommended Reading Allcargo Logistics, Container Corporation of India Ltd. (CONCOR), TCI Express.

Aegis logistics Share Price target – Technical Analysis

The Aegis logistics share price is trading above its long-term moving average of 200 DMA. The Aegis Logistics share seems to consolidate with the broader market. Once the share price crossed its previous swing high at the INR 300 level, the stock bounced toward the 390 level. The share looks good in the weekly and monthly chart with a strong volume crossing above 100 DMA. Once the broader market started bouncing, this Aegis logistics share price target can be 400 level or higher.

Aegis Logistics Share Price Weekly Chart
Aegis Logistics Share Price Weekly Chart