Aegis Logistics has been a top performer for patient investors. The stock has surged over 1,600 percent in the last 10 years, making it a good bet for long-term investment.
The scrip, which traded around Rs 11 in December 2009, has rallied to Rs 189 currently, giving returns of as much as 1,618 percent. To put it in perspective, an investment of Rs 1 lakh in 2009 would have turned to Rs 17.2 lakh in 2019.
With a current market capitalisation of nearly Rs 6,500 crore, the stock hit its 52-week high of Rs 241 on May 29, 2019, and a 52-week low of Rs 160 on October 9, 2019. However, the stock has declined 10 percent in 1 year and 7 percent in 2019 owing to the ongoing slowdown.
Among peers, Shreyas Shipping and Logistics gained 172 percent, Gati has added 2.5 percent and Sical Logistics lost 71.3 percent in the ten-year period. Other logistic firms were listed post-2015.
The earnings have also seen a steady rise for the company. Net profit rose from Rs 27.39 crore (in FY09) to Rs 88.62 crore in FY19, up 223 percent, while revenue also increased to Rs 707.06 crore in FY19 from Rs 386.2 crore in FY09.
Analysts are also bullish on the stock and expect the company to maintain the momentum in volumes as it lacks competition from other private players in India. According to management, the company is expected to see gas throughput jump around 1.6-2.3 mmtpa over the next two years (on the base of 2.5 mmtpa in FY19).
As per a report by Motilal Oswal, the company has been a key beneficiary of the government’s thrust on increasing LPG penetration in the country. In FY19, it handled 2.5 mmt (19 percent) of the total 13.2 mmt LPG imports in India. Over FY19-21, it is expected to post logistics volume CAGR of 25 percent with logistics EBITDA CAGR of 40 percent, it added.
"The company plans to fund its entire capex through internal accruals. We expect a strong free cash flow generation of Rs 650 crore over FY20-21. Return ratios are likely to hover above 20 percent over the same period. The company expects a tax rate of 15-18 percent over the next 5 years as it enjoys tax incentive under the infrastructure holiday provision," the report explained.
The logistics enhancement is expected to help the company ramp up its market share to 30-33 percent in the near to medium term. Logistics is expected to contribute 64 percent to the gas division’s total EBITDA in FY20-21, led by improving utilisation at the Mumbai and Pipavav LPG terminals, the brokerage further noted.
Aegis Logistics Limited is in the business of import and distribution of Liquified Petroleum Gas (LPG) and storage and terminalling facility for LPG and chemical products. The company has storage facilities at Mumbai, Haldia, Pipavav, Kochi and Kandla. The Aegis Group captures the complete logistics value chain starting from sourcing terminalling to retail distribution of LPG.