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Brokerages turn bullish on Aegis Logistics; here's why

Brokerages turn bullish on Aegis Logistics; here's why

The share has delivered more than 105 per cent returns in the last 12 months and risen 48 per cent since the beginning of this year

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Share of Aegis Logistics rose nearly 5 per cent to hit a fresh 52-week high of Rs 374.80 as brokerages maintained their bullish view on the stock post announcement of March quarter earnings.The share has delivered more than 105 per cent returns in the last 12 months and risen 48 per cent since the beginning of this year.

The stock opened 1.9 per cent higher at Rs 363.00 against the previous close of Rs 356.20 on BSE. Market cap of the firm rose to Rs 39,658.97 crore.

The share stands higher than 5 day, 10 day, 20 day, 50 day, 100 day, and 200-day moving averages.

For FY21, the net profit grew 124 per cent to Rs 223.38 crore while income declined 46 per cent to Rs 3880.33 crore.

The company reported a net profit of Rs 65.43 crore in Q4, down 8 per cent on a Y-o-Y basis. Profit in the December quarter stood at Rs 71.16 crore. However, the profit grew 91.82 per cent from Rs. 34.11 crore in March 2020.

Net Sales stood at Rs 1,011.17 crore in March 2021 down 18.56 per cent from Rs 1,241.65 crore in March 2020.

LPG logistic volumes were down 2 per cent YoY to 714.9tmt (down 8% QoQ) as the Haldia LPG terminal saw the exit of BPCL volumes.

Here is what brokerages have to say:

Nomura has a 'Buy' call on the stock with a target price of Rs 570 per share. It said that the company has a simple yet robust business model with strong growth prospects.

It also noted that major capital project completion in FY22 will drive volumes from FY23 and the next leg of growth projects can provide further rerating trigger.

According to Motilal Oswal, Aegis Logistics (AGIS) reported a miss on our estimates, primarily due to a drop in the Gas business, while the Liquids business performed robustly.

The Gas Logistics business was impacted as Aegis Logistics reported a shift in BPCL volumes from its Haldia LPG terminal to its recently commissioned terminal.

The brokerage firm expects a logistic volume CAGR of 20%, coupled with a logistic EBITDA CAGR of 20 per cent, over FY21-FY23. It also expects strong free cash flow generation of Rs 15 billion cumulatively over FY22-23 (FCF yield of ~13%), with over 20% improvement in return ratios.

"We keep our FY22/FY23 Gas Logistics volumes unchanged at 3.5 MMT/4.3 MMT in FY23, a jump of 1.2 MMT over FY21. Historically (over FY16-20, FY21 being exceptional), AGIS has clocked logistic volume growth of 0.5 MMT per year," added Motilal Oswal.

The brokerage house has a 'Buy' call on the stock with a target price of Rs 400 per share.

Aegis Logistics indicated that it would announce its long-term growth strategy and new CAPEX plans in June 2021.