Aegis Logistics Ltd Q3 FY22 Earnings Conference Call Insights

Key highlights from Aegis Logistics Ltd (AEGISCHEM) Q3 FY22 Earnings Concall

Management Update:

• For 4Q22, the company expects that sales volume will continue to grow in line with 3Q as will the earnings for Gas and Liquid segments.

• Kandla project is progressing well, and the company fully expects it to be commissioned by March end.

Q&A Highlights:

• Lavanya Tottala of UBS asked about what will be potential increase in volumes after VLGC comes up. Raj Chandaria MD said that for VLGC operations, the Jetty will be VLGC compliant by the end of June 2022. And once the Jetty is complete, customers who are already using Pipavav port because of the excellent rail connectivity, customers will be bringing cargoes in VLGCs to the port.

• Lavanya Tottala of UBS asked about the utilization level of Pipavav with the rail gantry operation. Raj Chandaria MD replied that for utilization, specifically for this particular port, the company doesn’t generally break out every single port. But Pipavav remains an extremely competitive port, and the company is expecting solid volume increase through that facility.

• Lavanya Tottala of UBS asked about Haldia that with the improvement in volumes in 3Q22, if the company is close to the normal levels before the exit of BPCL. Raj Chandaria MD replied that Haldia has bounced back nicely. And the company has more or less recovered a significant portion of those volumes, primarily due to the fact that HPCL has been performing extremely well in that region and fully back on track, especially in next quarter and thereon.

• Lavanya Tottala of UBS enquired about the new bottling plants, which are coming up, the capacity of that and the potential incremental volumes from them. Raj Chandaria MD answered that at this point, the company is not ready to give out individual bottling plant volumes. So as the company rolls out additional bottling booking plants, the numbers will be seen tracking nicely through the retail numbers as well.

• Priyankar Biswas from Nomura asked that in Kandla, if the company is facing any issues related to commissioning. Raj Chandaria MD replied that the company did face issues. In the last few months, the company did have an issue during the whole commissioning of the project with COVID-related issues and so on. The company expects to commission by March 31 as anticipated.

• Priyankar Biswas from Nomura also asked that on the retail coverage where is the company now and its targets for FY23, FY24. Murad Moledina CFO replied that the company has around 131 Auto LPG station. The number of distributors for packed cylinders is 254 where the company stands now. As far as volume growth, the company expects 25% to 30% for the next couple of years.

• Himanshu Yadav with Edelweiss asked if the company has seen any improvement in the margins for the LPG business, either for distribution or logistics. Raj Chandaria MD replied that throughput volume continues exactly, there is no change in that. The company has had good margins on both liquids and the retail.