Aegis Logistics Ltd (NSE: AEGISLOG) Q2 2025 Earnings Call dated Nov. 19, 2024
Corporate Participants:
Raj Chandaria — Chairman of the Board, Managing Director
Murad Moledina — Chief Financial Officer
Analysts:
Vikram Suryavanshi — Analyst
Kumar Saurab — Analyst
Rajesh Agarwal — Analyst
Rajesh Agarwal — Analyst
Amit Vora — Analyst
Kunal Bhatia — Analyst
Vineet Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day. And welcome to the Aegis Logistics Limited Q2 and H1 FY25 earnings conference call. [Operator Instructions] Please note that this conference is being recorded before we begin the call. I would like to give a short disclaimer. This call may contain some forward-looking statements which are completely based upon our beliefs, expectations as of today. The statements are not a guarantee of future performance and involve unforeseen risks and uncertainties with this.
I would now like to hand the conference over to Mr. Raj Chandaria for his opening remarks over the user.
Raj Chandaria — Chairman of the Board, Managing Director
Thank you very much. And welcome to this slightly related future conference call. We obviously had the Diwali break. Good evening, I’m joined by our CFO Mr Mora Olana and M DE from our investor relations team and we will be presenting the performance for the first half of ended on 20 September or September 24. I did announce that we have achieved a record consolidated normalized ebita of 487 CORS in the first half of 25 F I 25 making our highest ever half year performance to date. Both divisions contributed to this performance. Liquids are reported an operating EBITA of 201 cors while the LP G division delivered 286 scores and our profits for the first half exceeded 300 scores. And the earnings per share stood at 7.33.
The primary drivers behind this performance have been the sustained growth in volumes at our terminal along with the expansion in the liquid business through the addition of new capacity and high utilization of recently commissioned tanks. And we did also achieve the highest level logistics volume for gas in the first half. As I noted in previously, agency purpose is to support India’s transition towards a more sustainable future.
And consistent with that vision, we had announced the capacity expansion at our first ammonia terminal of 25,000 capacity which will be located at the par and we expect to commence construction soon. But but of course, after receiving all the necessary permits from the regulatory authority, and I’m really pleased to announce that we have already received commitment, a commitment from an anchor customer So that goes well for the future of this business. And we expect to build more ammonia terminals as this business matures. And our endeavor in this business will be to become vertically integrated just like we are in the LPG business.
India is an important ammonia market and we expect to leverage our skill set in building and operating Quadgen Gastros in the LP G division. Our ongoing capacity expansion at Mangalore New Mangalore in South Africa and people in Europe is expected to increase our LP G storage capacity by 130,000 metric tons. By the end of fiscal ’25 in the Liquid division. Our ongoing Greenfield expansion at A VT IN M is aims to increase our storage capacity by about 101,900 cubic meters almost complete. And I think by the time we have our next call, we should be able to announce this part commission.
We’re also excited to announce that we have been allocated land by the port in Mumbai for further expansion. And we plan to build a storage terminal with capacity of approximately 150,000 C meters on this site. With an estimated project cost of around 250 cors.The, the performance in the first half H1 and the commissioning of the new projects in both the greenfields and brownfields currently underway, really strengthens our confidence in meeting our ts that we’ve given in achieving a 25% cagr over the next three years.
And in the last call, we have given you an update on the capital expenditure program of let me repeat that out of the total capital program of 4,500 calls by FY 37 approximately already 50% is complete and or currently in progress and we anticipate that the People and Manor Project will be commissioned soon with the revenue expected to start in Q1 of FY in 26 the pace of capital spending is expected to persist beyond FY27 as we explore further opportunities which are in our pipeline before I hand over the call to our CFO to brief you on the financial performance of the company in more detail.
Let me update you on the developments at AIS Gopa terminals Limited, our subsidiary yesterday. I’m pleased to announce that this this company filed AD RHP for an IPO. And the document has been uploaded on the website and it’s also available on the website of 84 pack terminals limited and the capital raise in ad TL will help the company reduce a certain portion of the outstanding debts and also some portion will help fund other general corporate purposes.
So to summarize the coming year should see higher revenues and profitability led by the additional capacities which are already under construction and set to come online in phases by the end of F 0.25 26 the continuing ramp up of the Kandla LPG terminal along with the improved utilization at our existing terminals and leveraging the terminals and supporting infrastructure to increase our distribution business.
So with that, I’d like to hand over the line to Mr. Murad Moledina, our CFO to present the financial performance [Indecipherable] Mr. Murad, over to you.
Murad Moledina — Chief Financial Officer
Yeah, thank you, sir. Good evening. Both of our divisions have performed very well for the half year ending September 2024. We achieved another record breaking quarter with the highest EBITA ever recorded in H1 of FY25. Our H1 FH FY25 profitability also crossed 300 crore. That is 310 crores. So for the group A beta for H1 F 525 stood at 487 crore, an increase of 10% year on year profit after tax increased also by 10% to 310 crore. For the half year F 5 25 283 crore in H1 FY24 earnings per share. 7.33 in H1 FY25 as compared to 6.92 for H1 FY24.
I would now like to provide you with some more detail on the individual segments beginning with liquids business. H1 FY25 revenue from liquid segments to that 273 grow as compared to 232 growth in H1 FY24. An increase of 18%. Yoy we delivered the highest ever H1 EBITA 201 crore versus 158 crore in the previous year. Same period which is an increase of 27%. This improved performance can be attributed to the new capacities coming online as well as acquisitions at Kandla KCI and Manor LP G business in H1 FY25. The beta from LP G was 286 crore. We again delivered the highest ever H1 EBITA for gas, which was also slightly above H1 FY24.
Now let me give you details of each sub segment logistics volume throughput volumes in H1 FY25 the LP G volume handled at all our four terminals, Mumbai Haldia, Kandla and Deepa was 2.08 million metric tons versus 1.90 million metric tons in H1 F 524. That is an increase of 9%. The distribution of volumes of auto commercial and industrial bulk segment handled 2.58 lakh metric ton in H1 FY25 against 2.9 million 2.9 like metric ton in H1 F 524. However, the volumes for Q2 FY25 were in line with Q1 FY25 volumes, sourcing volumes. The sales volume of sourcing business, Q1 F 525 was 318,000 metric tons was 400,000 metric ton. In the same quarter. Last year, the financial position of the company remains robust with low debt, strong cash flows and a solid balance sheet.
With this. I now hand over this line to the moderator to start the question and answer station. Thank you.
Questions and Answers:
Operator
[Operator Instructions] Our first question comes from Vikram Suryavanshi from PhillipCapital. Please go ahead.
Vikram Suryavanshi
Hi and, good evening, sir. Just to confirm that mobile liquid storage capacity that we are doing for INR250 crore. Will it be part of the JV or a standalone.
Raj Chandaria
We will be [Speech Overlap]
Murad Moledina
Yeah.
Vikram Suryavanshi
Thank you JNPD Also.
Murad Moledina
No, JNPD will be in the JV.
Vikram Suryavanshi
Okay. Okay. Okay. And what is the status? I think I just want to reconfirm this liquid capacity expansion of the Kandla 25,000, then Bangalore 71, and Kochi.
Murad Moledina
Okay. Okay. Okay. And what is the status? I think I just want to reconfirm this liquid capacity expansion of the Kandla 25,000, then Bangalore 71, and Kochi.
Vikram Suryavanshi
And when is it? Okay.
Murad Moledina
Sorry.
Vikram Suryavanshi
Bangla, when it is expected.
Murad Moledina
Kandla should also happen by this FY25.
Vikram Suryavanshi
Okay. Okay. You give me a bit about gas, I on Mor and paper already by 525.
Murad Moledina
Correct, yeah.
Vikram Suryavanshi
Yeah, okay. And in case of Aonia, how is the asset compared to gas business? And does it require the special approval process or just to get more idea of the business?
Murad Moledina
No, the permits are similar. Of course the infrastructure does have additional equipment of to cater to the specific requirements of ammonia. The turnaround is not as much as LP G but the rates are higher for the throughput. So it’s, it is more like liquid business where it is more based on static capacity and the rates generally are 2.5 to three times the rate of LP G.
Vikram Suryavanshi
Understood. And last question from my side is about we have a person of retailing in LP G but are there a similar for ammonia or it will be more like an additional sales.
Murad Moledina
We are exploring? So it’s too early to say anything on that. But we, we are exploring. You cannot say retailing but industrial distribution kind of volumes may be possible.
Vikram Suryavanshi
Thank you very much.
Operator
[Operator Instructions] The next question comes from Kumar Saurab from Scientific Investing.Please go ahead.
Kumar Saurab
Hello. Am I audible?
Operator
Yes, sir. Please go ahead.
Kumar Saurab
Yeah. So my question is regarding the D DRHP which has been filed, If you can highlight how is going to be the structure and when the current company will become more of a hold co because bulk of the business will go to this JV, which will get listed. So from current shareholders offices for perspective, how do you see the transaction if you can elaborate on it?
Murad Moledina
We have just filed the DRHP today and we’ll discuss more in the coming quarter as far as Drhp is concerned, we have already said earlier that the equity infusion into the JV will be value Aor to the wholeco because we are eliminating interest cost, which is a very high cost for infrastructure companies. So even though minority interest might increase, it will be compensated by the decrease in interest cost as this, these funds will be used to pay the debt. So the wholeco in that case will remain unaffected that, you know, because the decks are going will will go off the books.
Kumar Saurab
Okay. Okay. And sir, one bookkeeping question. How the profit from this day we currently flows into a logistics. That is question one and second I request once we have spent, let’s say one week, you know, all of us can go through the DRHP, we can have a call, you know, just to discuss that and the answers of that like you discussed once when we had work, that would be great.
Murad Moledina
So the JV consolidation happens line by line on account of it being a subsidiary even after the IPO as and when it happens, it will, we will have management control and it will still get consolidated line by line. So there will be no change whatsoever. Secondly, the RHP we are very near because this time we did earnings call a little late on account of Diwali and certain we were also a little occupied. So we will have our next call very soon. And I think that will be end of January. So we’ll discuss more at that time.
Kumar Saurab
Yeah, sure, sir, sir. Last question, I think you have also recently filed for expansion in the hydrogen capacity. You know any details about that, how much capacity when it will go live?
Murad Moledina
We have not find anything on hydrogen as yet.
Kumar Saurab
Okay. Sorry, sorry for the. Okay. So wish you all the best. Thanks.
Operator
[Operator Instructions] The next question comes from Rajesh Agarwal from Atarva Investment Managers. Please go ahead.
Rajesh Agarwal
Good evening, sir. It’s a pleasure to interact with you. I just had some, you know, of some quick questions regarding the capacity, a liquid capacity. If you can just help me with the location wise capacity and what is the expansion? I somehow keep missing the total capacity and expansion being planned. I can quickly, you know, say out the capacities loud and if you can confirm it’s the correct one.
Murad Moledina
I think it is better that you look at the specific slide which is in our investor presentation which gives four w capacities in the pie chart. So there cannot be anything different than that. It would be much easier if you look at our H1 FY25 investor presentation.
Rajesh Agarwal
Is that the one I mean the one which has been uploaded. I’m sorry, I’m missing that pie chart in that presentation.
Murad Moledina
Or you can, what you can do is this time there was some restrain on us on account of this DRHP filing. You can look at Q1 FY25 where you will definitely find it, and it is very clearly the splits have been given. In case of gas as well as liquid four, twice capacities.
Rajesh Agarwal
All right, sir, I have the presentation also in front of me.
Murad Moledina
Slide 49.
Rajesh Agarwal
Slide 49 okay.
Murad Moledina
48 sorry.
Rajesh Agarwal
Great. Thank you. I mean it’s the same, right, whatever there is, it’s the same.
Murad Moledina
Yeah, yeah, no change.
Rajesh Agarwal
And the expansions?
Murad Moledina
Expansions is also given in the slide, if you look at the investor presentation, the expansions have also been mentioned. The expansion is in JMPT which is 100,000 approximately. There is 71,000 odd in Bangalore, 25,000 odd in Kandla and Mumbai, we have just said 150,000 is yet to begin. These are the current expansions which are happening in the.
Rajesh Agarwal
Yes, thanks, Murad sir, and the earlier one you What you mentioned 25,000. Is that right?
Murad Moledina
Yeah, [Indecipherable]
Rajesh Agarwal
— Okay. Thanks. Sorry for taking your time.
Murad Moledina
Thank you.
Operator
[Operator Instructions] The next question comes from Rajesh Agarwal from Moneyore. Please go ahead.
Rajesh Agarwal
Hello sir recently the question of actual kind of ATM mechanism has been reduced. Government of India. So if the the cnd prices goes up, goes up, will it benefit our distribution volumes?
Murad Moledina
There is always a competition between fuels. So a problem for one fuel is always advantage to the other fuel. But in spite of that, LP G has always been cheaper than natural gas, but it will make it more expensive. Time will tell how this affects our volume and contribution.
Rajesh Agarwal
So currently how much it is lower by from CNG LPG?
Murad Moledina
It, it, it keeps changing but it is generally between 10 to 20% difference. It will always be there always, it is lower than the value which it has more than natural gas by 25%.
Rajesh Agarwal
Understood. Okay. So that was my question.
Murad Moledina
Yeah.
Operator
Thank you a reminder to all the participants. If you wish to register for a question, please press star. And one now our next question comes from Amit Vora from the Homeopathic Clinic. Please go ahead.
Amit Vora
Yeah, good afternoon, everyone. I’m an individual investor and thank you to everyone for giving me the chance. And my question is sir regarding, are we confident that this year also this current 525 we will achieve 25% growth as compared to 524.
Murad Moledina
We try our best. So what we have always given a guidance is that in the five year period, average C hr growth will be 25%. So it is not necessary that it will be exactly 25% every year. But we are very confident that in the five years period from F 522 to f 527 because of the infrastructure that we are undertaking, We would be in a position to achieve an average cagr growth of 25%.
Amit Vora
What about it? That was very great about you sir. One more question about A BT L as an individual investor, we have a lot of, we don’t have the technical knowledge like an analyst or something. If you can as an individual system and make us understand something about a VPL, we have some.
Murad Moledina
Look at the website which is gone live and you will be able to get the details.
Amit Vora
Okay. Okay. Okay. Thank you very much.
Murad Moledina
Thank you.
Operator
[Operator Instructions] Our next follow up question comes from Vikram Suryavanshi from PhillipCapital. Please go ahead.
Vikram Suryavanshi
Thank you for giving us the opportunity again. So basically this mobile facility which is coming, will it be part of the not contain the facility which already have the subsidy.
Murad Moledina
Aegis Logistics limited.
Vikram Suryavanshi
Aegis Logistics Limited.
Murad Moledina
Yeah.
Vikram Suryavanshi
And the INR250 crore will be expansion including land and everything or will it be land will be leased from the port?
Murad Moledina
Land is leased from the port.
Vikram Suryavanshi
Okay. So basically INR250 crore will be more on the asset side only and okay. And my line will be late.
Murad Moledina
Yeah.
Vikram Suryavanshi
Okay. Okay.
Operator
Vikram sir, you have any further follow up questions?
Vikram Suryavanshi
No, thank you.
Operator
[Operator Instructions] The next question comes from Kumar Saurab from Scientific Investing. Please go ahead.
Kumar Saurab
Hello. Yes, sir. My question was on ammonia. I’m sorry, it was not hydrogen. For ammonia, you’ve done a filing and it says it will go like by FY26. So what is the asset turn and what is the kind of margin expected out of that business?
Murad Moledina
You know, it is very we have we have just stepped into ammonia business including the terminal. So like I’ve always like I have already said that it is more like liquid business which works on the study capacity and the revenue rates are generally 2.5 to three times the revenue rate of LP G. The big margins are similar around 90% and that is the way it is.
Kumar Saurab
Okay. Okay. And sir, what is the opportunity size in this business like I’m not asking for one or two year, but in terms of longer run based on your study, what is the opportunity size for you?
Murad Moledina
45% of India’s energy needs are by unprocessed biomass. So there is something called energy transition that is happening. It depends on the pace at which there is a transition from dirty fuel to clean fuel. Ammonia is a clean fuel, it is non fossil it is also a carrier of hydrogen. So it has got lots and lots of classes which makes us believe that there will be a growth in this sector, but we are not in a hurry. We will as the market will make sure we will undertake development of these ammonia terminals at various sports.
Kumar Saurab
Okay. Thanks for the detail, sir. All the best.
Murad Moledina
Thank you.
Operator
Thank you. The next question comes from Kunal Bhatia from the Dalal & Broacha Stock Broking Limited. Please go ahead.
Kunal Bhatia
Oh yeah. Sir, thanks for the opportunity. So I just wanted to know what’s your outlook on the sourcing volume? Because this time it was slightly below the expectation. So what’s your outlook on the sourcing volume? And I’ll Ask a follow up later.
Murad Moledina
Sourcing volumes. Do not move my needle. The margins are very, very slim as far as sourcing business is concerned. We do sourcing business to provide value addition to our customers if and as and when they need. So the business does not depend, the profits do not depend on sourcing business. So we only do that if and it is always back to back. So when we are able to get value for our customers, we source LP G for them, you know, these are very big customers like the national oil companies and other big companies. So wherever and whenever we are able to provide them value we do that, but it is, it has not a great significant contributor to our beta.
Kunal Bhatia
Okay. And so my second question was in regards to this IPO, which we have planned. So post this IPO. Could you give us some sense on how much would be our stake in the the new entity which is listed? And how will it affect the current shareholders of logistics? So,
Murad Moledina
We do, like we said, we have just filed it today. So we, you you can look at the DRHP and next time when we meet on an earnings call, you would have absorbed a lot of data and we would be in a position to talk on more in more detail. So our upcoming earnings call will be sometime in January. I think that’s a better time to talk about this. We just about find it a few hours ago. So.
Kunal Bhatia
Yes, sir, I understand the filing happened today, but obviously, the planning of this would have happened since a long period of time because as a current current shareholder.
Murad Moledina
We are not at liberty to talk as of now. So just give us some time next time. Like I said, we’ll be able to talk, but I’ve already explained that this IPO proceeds will be used to pay the debt and therefore, interest will go down, which will compensate the minority interest increase.
That is going to happen and the dilution, both the partners would be doing equally. So all of it will not come to any one partner, the dilution and we would obviously be doing in two phases equity issue. So all of it is not going to happen in the first phase itself. I think I will limit myself to this now. Let me discuss more in the coming earning call.
Kunal Bhatia
Okay.
Operator
Mr. Bhatia, do you have any further questions?
Kunal Bhatia
No, that’s it.
Operator
Thank you. The next question comes from Vineet Jain from Sith Capital. Please go ahead.
Vineet Jain
Yeah. Thank you for the opportunity. My first question is on is there any further update on the Kandla Gur pipeline?
Murad Moledina
It is progressing well, and I think sometime mid of next year it should be commissioned.
Vineet Jain
So my bank, I can we expect by the Q3. Can we expect some some, some business to go through that?
Murad Moledina
We hope so. Let us see.
Vineet Jain
Sir and one clarification that pneumonia site is in the JV on the stand alone.
Murad Moledina
Ammonia will be in the JV.
Vineet Jain
So post the IP of it is. So the stand alone will be left with a lot of cash. So what do you plan and have you already planned anything or can you give some idea over there?
Murad Moledina
So post the IP of it is. So the stand alone will be left with a lot of cash. So what do you plan and have you already planned anything or can you give some idea over there?
Vineet Jain
Okay. Thank you.
Operator
Thank you, ladies and gentlemen, we would take that as a last question for today. I would now like to hand the conference over to the management for closing comments.
Raj Chandaria
Okay. Yeah, thank you for all those interesting questions. I hope we’re able to answer them. And of course, we will have another opportunity in a short period of time once in January. We’re quite optimistic about the direction of the company’s future.
We continue to be see gains in revenue to improve utilization and a favorable product mix. And we will keep you updated every quarter. So thank you very much for joining our call. And we’ll speak next time. Thank you.
Murad Moledina
Thank you.
Operator
[Operator Closing Remarks]