INDIA

Logistics Aegis Logistics

Initiation 31 August 2010

Unrated Creating value in oil & gas logistics Key Data

Aegis Logistics (Aegis), a leading player in the oil and gas Bloomberg Code AGIS IN
logistics space, is well-placed to capitalise on the Reuters Code AGES.BO
emerging opportunities in the sector. It plans to build a Current Shares O/S (mn) 31.3
network of port terminals, expand storage capacities
Diluted Shares O/S(mn) 31.3
and foray into new businesses like crude oil storage and
commercial packaged LPG cylinder. We expect the Mkt Cap (Rsbn/USDmn) 9.5/202
company to record 44.6% revenue and 25.7% earnings 52 Wk H / L (Rs) 328/72
CAGR over FY10-13E. We estimate RoCE to improve from Daily Vol. (3M NSE Avg.) 443,788
17.3% in FY10 to 24.9% in FY13 and RoE to expand from
Face Value (Rs) 10
24.3% in FY10 to 28.4% in FY13. Going ahead, we expect
earnings growth to drive valuations, rather than any USD = Rs46.8
significant P/E expansion. We initiate coverage and have
not rated the stock.
Shareholding Pattern (%)
 Unique infrastructure creating high-entry barriers:
Aegis has created unique infrastructure in its core Foreign, 2.79 Institutions,
3.01
business of providing logistics services to the oil & gas Non Promoter
Corp. Hold.,
industry. We believe issues like location, terminal 8.44
handling expertise and capital intensity would create
high-entry barriers for competitors. It would be difficult
for other companies to create similar assets like the
storage terminal and the 20-acre land Aegis owns near
the Mumbai Port. Further, it would also be difficult to Promoters,

replicate the terminal-handling expertise Aegis has 66.54

acquired over the last 30 years.

As on 30 June 2010
 Building a network of terminals for the next growth
trajectory: Aegis plans to build a national storage and
distribution network of port terminals and inland One Year Indexed Stock Performance
depots to propel itself into the next growth trajectory. 450
Apart for increasing its liquid logistics business, these 400
350
terminals would enable it to enter into newer business 300
like crude oil storage, bunkering and jet fuel logistics. 250
200
 Gas distribution to be major revenue growth driver: 150
100
We expect the gas segment to outperform the liquid 50
logistics division. Growth in auto-gas business (52.9% Aug-09 Oct-09 Dec-09 Feb-10 Apr-10 Jun-10 Aug-10
revenue CAGR over FY10-13E) and acquisition of Aegis AEGIS LOGISTICS NSE S&P CNX NIFTY INDEX
Gas (Shell) (67.8% revenue CAGR over FY11-13) to fuel a
53.9% growth in the gas division’s revenues (FY11-13).
 Capacity expansion to drive liquid logistics Price Performance (%)
revenue: The company is augmenting its liquid 1M 6M 1Yr
handling capacity, which we expect to increase to
Aegis 10.4 159.1 295.0
428,000 kilolitres (kl) in FY13E (14.1% CAGR over FY10-
13E) and to 528,000 kl by FY14E. We estimate 9.0% Nifty Index 0.7 9.9 14.3
CAGR in liquid logistics revenue over FY10-13E to
Siddhartha Khemka Rs1,050mn. Source: Bloomberg, Centrum Research
siddhartha.khemka@centrum.co.in *as on 30 August 2010
+ 91 22 4215 9857

Y/E March(Rsmn) Revenue YoY (%) EBITDA EBITDA (%)Adjust. PAT YoY (%) FDEPS RoE (%) RoCE (%) P/E (x) EV/EBITDA (x)
FY09 3,862 (1.0) 548 14.2 274 (28.7) 8.7 16.9 13.7 34.5 18.4
FY10 3,049 (21.0) 718 23.5 430 57.0 13.7 24.3 17.3 22.0 14.6
FY11E 5,062 66.0 846 16.7 479 11.2 15.3 23.7 17.6 19.8 11.9
FY12E 7,194 42.1 1,066 14.8 654 36.6 20.9 26.8 21.8 14.5 9.3
FY13E 9,216 28.1 1,332 14.5 854 30.5 27.2 28.4 24.9 11.1 7.2
Source: Company, Centrum Research Estimates

Please refer to important disclosures/disclaimers in Appendix A

 25.7% CAGR in earnings
Investment Rationale
(Rs mn)

 A unique play in the oil & gas logistics segment with robust 900 14.1% 16%

25%+ RoE and 25%+ earnings growth. 800 14%

700 9.9% 12%
 Mumbai location is the key to logistics business.
9.5% 9.1% 9.3%
600 9.0% 10%
7.1%
500 8%
 Liquid logistics – Capacity expansion to drive revenue. 400 6%
300 4%
 Gas logistics business - indispensable for oil & gas companies.
200 2%
215 384 274 430 479 654 854
 Gas (LPG) business to be major revenue growth driver ahead. 100
FY07 FY08 FY09 FY10 FY11E FY12E FY13E
0%

 Acquisition of Shell Gas to help diversify LPG business Net Profit NPM (RHS)

Source: Company, Centrum Research Estimates

Summary Financial
Y/E March (Rsmn) FY09 FY10 FY11E FY12E FY13E
Key Income Statement Data
Net Sales 3,862 3,049 5,062 7,194 9,216
Growth (%) (1.0) (21.0) 66.0 42.1 28.1
EBIDTA 548 718 846 1,066 1,332
EBIDTA margin (%) 14.2 23.5 16.7 14.8 14.5
Depreciation 135.4 143.3 167.0 182.3 203.2
Interest expenses 413 575 679 884 1,129
Other non operating income 309 489 589 814 1,080
Share of P/(L) of associate (4) 4 0 0 0
PBT 36 50 30 30 25
Provision for tax 67 113 140 190 252
effective tax rate (%) 19.7 20.8 22.6 22.5 22.8 Earning to grow at 26%
Net profit 274 430 479 654 854 CAGR over next 3 years
-Growth (%) (28.7) 57.0 11.2 36.6 30.5
-Net profit margin (%) 7.1 14.1 9.5 9.1 9.3
Key CF Statement Data
Cash generated from operations 601 282 671 672 936
Cash flow from investing activities (353) (352) (255) (365) (415)
Cash flow from financing activities (148) 29 (446) (324) (428)
Net cash increase/decrease 100 (41) (29) (17) 93
Key Balance Sheet Data
Shareholders' fund 1,691 1,847 2,198 2,687 3,320
Debt to equity ratio set to
Debt 944 1,279 899 703 440 improve to 0.1x by FY13E
Deferred Tax Liability 210 201 205 209 213
Total Capital Employed 2,846 3,327 3,302 3,599 3,974
Fixed Assets 2,182 2,492 2,609 2,772 2,984
Goodwill 125 125 125 125 125
Investments 337 229 200 220 220
Net current assets 202 481 368 482 645
Total Assets 2,846 3,327 3,302 3,599 3,974
Key Ratios
RoE (%) 16.9 24.3 23.7 26.8 28.4 Return ratios to improve
RoCE (%) 13.7 17.3 17.6 21.8 24.9 on back of high
profitability
Per share Ratios (Rs)
Fully diluted EPS 8.7 13.7 15.3 20.9 27.2
Book value 54.0 59.0 70.1 85.7 106.0
Solvency Ratio
Debt-equity (x) 0.6 0.7 0.4 0.3 0.1
Interest coverage ratio (%) 17.8 11.1 10.3 6.4 3.6
Valuation parameters(x)
P/E (Fully Diluted) 34.5 22.0 19.8 14.5 11.1
P/BV 5.6 5.1 4.3 3.5 2.9
EV/EBITDA 18.4 14.6 11.9 9.3 7.2
EV/Sales 2.6 3.4 2.0 1.4 1.0
Source: Company, Centrum Research Estimates

2
Aegis Logistics
 Investment Argument
Aegis’ unique infrastructure creates high-entry barrier
Aegis has created unique infrastructure in its core business of providing logistics services to the oil & gas
industry. It would be difficult for other companies to create similar assets like the storage terminal and
20-acre land Aegis owns near the Mumbai Port. We believe issues like location, terminal handling
expertise and capital intensity would create high-entry barriers for competitors. Further, it would also
be difficult to replicate the terminal handling expertise Aegis has acquired over 30 years.
Strategic location of Mumbai Port
Aegis currently operates 3 liquid terminals (two at Mumbai Port and one at Kochi Port) with a combined
storage capacity of 288,000 kl. It has a strong presence at the Mumbai port, which is strategically
Mumbai is the 2nd largest located on the western coast, the heartland of India’s chemical and petroleum belt (Gujarat and
POL handling port in India Maharashtra). Mumbai is the second-largest port handling liquid cargo - POL (petrol, oil & lubricants)
after Kandla products after Kandla in Gujarat.
Exhibit 1: Mumbai was the 2nd largest liquid handling port in FY10
POL traffic at major ports Volume thru-put (mn tonnes) Market share (%)
Kandla 47.2 26.9
Mumbai 34.6 19.7
New Mangalore 21.3 12.2
Visakhapatnam 18.3 10.4
Chennai 13.4 7.7
Others 40.6 23.1
All major ports 175.5 100.0

Source: IPA, Centrum Research

Unique infrastructure – High entry barrier

Aegis owns and operates a large tank farm spread over a 20-acre land in Mumbai (Mahul, Trombay)
which is connected to three jetties at Mumbai Port. The company has been operating this facility for
almost 33 years. Built in 1977, the facility has a capacity of 162,000kl and consists of 36 tanks with sizes
ranging from 1,100kl to 10,000kl. It added a second site, Sealord Containers, at Mumbai Port with an
annual capacity of 75,000kl during FY08.
We believe that this gives the company a strategic advantage due to its proximity with the country’s
two major refineries – Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation
(BPCL). Aegis forms a critical part of the supply chain of HPCL and BPCL, with which Aegis is connected
with dedicated pipelines to provide quality logistic support with faster turnaround time.
Exhibit 2: Very few large national level private operators
Private liquid logistics players Capacity (kl) Location
National operators
Various
Indian Molasses Company (IMC) 926,000
(21 terminals in 13 ports)
Indian Oil Tanking (JV between Oil Tanking and IOCL) 250,000 JNPT - Mumbai
Zuari Indian Oil Tanking (JV between Indian Oil Tanking and Zuari Ind) 71,000 Marmugao - Goa
Local port-based operators
Ganesh Benzoplast 305,000 JNPT, Goa & Kochi
Gujarat Chemical Port Terminal 300,000 Cambay, Dahej
Chemical Terminal Trombay (Subsidiary of Tata Power) 40,000 Mumbai Port
BR Petrochem Pvt. Ltd. 30.117 Kochi Port
Indo-Nippon Chemical Co. 17,200 Kandla Port

Source: Various company websites, Centrum Research

3
Aegis Logistics
Aegis operates the only LPG terminal at Mumbai Port
Aegis’ strategic location makes its facilities indispensable for oil & gas companies as there is no other
LPG handling terminal at the Mumbai Port. Aegis provides thru-put services (storage and re-
distribution) to importers of LPG and propane at its gas terminal in Mumbai. Its key clients include oil
PSUs (HPCL, BPCL) and Reliance Industries (IPCL division).
The terminal consists of two fully-refrigerated LPG storage tanks of 10,000 tonnes capacity each
(combined capacity of 20,000 tonnes) making it one of largest private sector LPG players in India. The
terminal is connected with pipelines from the jetty on one side and with key clients on the other side.
Exhibit 3: Largest LPG facility in the private sector
Location Capacity (tonnes) Remarks
Private sector capacity
Aegis Logistics Mumbai 20,000 Largest private sector import facility in India
Aegis Gas Pipavav 2,700 Acquired by Aegis in 2010 from Shell Gas
Caltex Gas India Tuticorin 8,500 100% subsidiary of ChevronTexaco
ELF Gas India Mangalore 8,400 Subsidiary of Total, France
SHV Energy India Porbandar 8,100 Subsidiary of Dutch Co SHV Holdings NV
Essar World Trade Hazira 5000
Reliance Industries Hazira 3,000
Shri Shakti LPG Kakinanda 2,500
PSU capacity
South Asia LPG Company Vizag 60,000 50:50 JV between HPCL & Total of France
Indian Oil Corp Kandla 30,000
Indian Oil Corp Haldia 30,000
Finolex Industries. Ratnagiri 20,000 Taken on long-term lease by BPCL
HPCL Mangalore 16,800
East India Petroleum Vizag 9,000 Taken on long-term lease by HPCL
Chennai Petroleum Chennai 4,800 BOOT basis by Indian Oil Tanking

Source: www.infraline.com, Centrum Research

4
Aegis Logistics
Building a network of terminals for the next growth trajectory
Aegis plans to build a national storage and distribution network of port terminals and inland depots to
propel itself into the next growth trajectory. It is planning to leverage its expertise in handling liquid
products to become a niche player in professional third-party logistics services (3PL) for handling oil
and chemicals. Apart from expanding capacities at existing terminals at Mumbai and Kochi, and
building new at Haldia (Kolkata) and Pipavav (Gujarat), over the next few years, it also intends to enter
into other port locations and newer business opportunities.
Exhibit 4: Building a network of terminals across India’s coast line

Current presence
Planned locations

Source: Company, Centrum Research

Crude oil storage: future growth opportunity

Aegis intends to explore and exploit new business opportunities that can be serviced by its network of
terminals and depots once they are ready. Of the many interesting business opportunities that the
company can cater to in future, crude oil storage is the most promising and rewarding one.
Future business opportunities include:
 Crude oil storage (including transit and re-export storage)
 Bunkering (supply and transfer of fuel to ships from shore-based operators)
 Jet fuel logistics
 Operation & maintenance (O&M) contracts for oil companies
 Branded and non-fuel retailing through Aegis auto-gas retail outlets
The increasing importance of crude oil in the global economy and the high volatility in prices has led to
a boom in demand for oil storage facilities. Its importance has also increased for international
commodity traders who want to benefit from arbitrage and contango strategies.
While the recent liberalisation of the petroleum sector and implementation of Free Trade and
Warehousing (FTWZ) Act in India has allowed the entry of global oil traders into the country, the oil
storage capacity in the private sector is relatively small by global standards. With only a handful of large
national level terminal operators, these international traders have limited choice. We believe Aegis is
positioning itself to take advantage of this new emerging opportunity.

5
Aegis Logistics
Liquid logistics – Capacity expansion to drive revenue
Aegis intends to aggressively increase its liquid storage capacities to above 500,000kl by FY13 from the
current capacity of 288,000kl. It plans to expand its capacity well in time to reap the advantages of the
increased demand in the trade and movement of oil and petroleum products. The company plans to
leverage its expertise and strong relationship with key clients built over the years at Mumbai to other
port locations as well. We have assumed the capacity to grow at 16.4% over FY10-14E and increase to
428,000kl by FY13 and 528,000kl in FY14. To achieve this, Aegis has adopted a mix of organic as well as
inorganic route.
Blending organic and inorganic growth to increase capacity
Aegis has used both organic and inorganic strategies to grow in the past. We believe this is apt in an
industry which has remained fragmented with large number of local players. In 2006, it acquired
Sealord Containers, an Adani Group company, and developed a storage capacity of 75,000kl, near
Trombay in Mumbai. This facility became fully operational in Sept 2007. Further in FY08, it acquired
100% stake in Konkan Storage Systems (capacity: 51,000kl) at Kochi.
The company recently acquired 100% of Shell Gas (LPG) India in April 2010. Shell had a LPG terminal
and land at Pipavav port, Gujarat, where Aegis plans to build and develop a liquid storage terminal. We
expect the 100,000kl capacity terminal to be operational by FY14. It will also develop a green-field liquid
terminal at the land allotted by the Port authority at Haldia Dock. This terminal is likely to have a
capacity of 50,000 kl and is expected to be operational by FY13.
Exhibit 5: Liquid logistics capacity set to increase 1.8x by FY14
('000 KL)
550

100
450
50 50
350
91 91
51
51
250 51 51 51 75 75 75
75
75 75 75
150
192 212 212 212
162 162 162 162
50
FY07 FY08 FY09 FY10 FY11E FY12E FY13E FY14E

Trombay Sealord Kochi Haldia Pipavav

Source: Company, Centrum Research Estimates

The company is also planning brown-field expansions at its current terminals in Trombay and Kochi
through de-bottlenecking and by building additional storage facilities. The Trombay capacity is likely to
increase by 30,000kl in FY11 and 20,000kl in FY12 taking the total to 212,000kl in FY12. New capacity of
40,000kl would be created at Kochi on the additional land acquired near the existing terminal.
The liquid logistics business follows a service fee-based revenue model. While the topline is not huge,
margins and profits are high. The division contributed only 26.6% to total revenue in FY10, but with
PBIT margins of 45.6%, it contributed 49.6% to operating profits (PBIT). The company enjoys high
margins due to its unique infrastructure with proximity to the port, state-of-the art storage facilities and
well connectivity through pipelines.

6
Aegis Logistics
 Exhibit 6: Liquid revenues to grow at 9.0% (FY10-13) as capacity increase
(Rsmn) (%)
1,200 70
59.1
55.5 54.6 52.4 60
1,000 49.8 50.0 48.0
47.7 45.6
50
800 40

600 1,050 30
926
810 835
706 20
683
400
528 488 10
460

200 0
FY05 FY06 FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Segmental Revenue (Rs mn) PBIT Margins (%)

Source: Company, Centrum Research Estimates

Liquid logistics segment to benefit from high import dependence

India is currently the 5th We believe Aegis is well-placed to benefit from the increased consumption and trade of oil & petroleum
largest energy consumer
and imports 80% of its
products in India. While India continues to depend on imports of crude and petroleum products for
crude oil requirements domestic consumption, it has also started exporting refined products. We expect this would lead to a
substantial increase in demand for logistics support services like terminal handling, storage and
distribution.
India is currently the world’s fifth largest energy consumer, and according to the World Energy Outlook
2009 published by International Energy Agency, it is likely to overtake Japan by 2025 and become the
third-largest importer of oil after the US and China. Indian refineries consumed 161mn tonnes of crude
in FY09, out of which 80% (128mn tonnes) was imported. India is also fast becoming a global refinery
hub with refined petroleum products exports significantly increasing at 20.4% CAGR from 10.1mn
tonnes in FY02 to 36.9mn tonnes in FY09. India exported 24.3% of its production of petroleum products
during FY09, up from just 8.4% in FY01.

Exhibit 7: Consumption and import of crude in India Exhibit 8: Export & import of petroleum products
(mn tonnes) Crude oil Petroleum products
(mn tonnes)
170 161
156 45 41
147 40 37
150
34
127 130 128 35
130 122 122
30
113 112 23
107 25 23
110 103 99
96 18 18 18
90 20
15
90 79 82 15 12
74 9 8 10 10 9
10 7 7 8
70
5
50 -
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Consumption Gross Imports Imports Exports

Source: Ministry of Petroleum & Natural Gas Source: Ministry of Petroleum & Natural Gas

We also expect Aegis to benefit from the India’s fast-growing chemical & petrochemical exim trade,
which has significantly increased from 2.4mn tonnes in FY02 to 5.1mn tonnes in FY09 (11.3% CAGR).
Given Aegis’ expertise in handling specialty chemicals, we believe that it is well suited to benefit from
this growth.

7
Aegis Logistics
 Gas distribution to be major revenue growth driver
We expect the gas segment to outperform other segment over the next few years, primarily on the back
of growth in auto-gas, Aegis Gas (Shell) and volume growth in the thru-put business.
The growth in commercial packaged gas and auto-gas business is likely to fuel 53.9% growth in the gas
division’s revenue over FY10-13, while total LPG volume handled is expected to grow to 0.50mn tonnes
at 16.5% CAGR over FY10-13E. Gas business’ contribution to total revenue is likely to increase to 88.6%
in FY13E from 73.4% in FY10 and 66% in FY06.
Aegis Gas (Shell) is expected to contribute 20% and 24% of total revenues in FY12E and FY13E,
respectively, growing at 67.8% CAGR over FY11-13. Further the auto-gas business is likely to grow at
52.9% over FY10-13E on the back of increase in the number of retail outlets to 182 in FY13. The thru-put
business is expected to improve on back of higher demand from Reliance-IPCL and is likely to boost
profitability as it is a service-fee based revenue model.

Exhibit 9: 53.9% revenue CAGR of driven by distribution Exhibit 10: Volumes to grow at 16.6% over FY10-13
business
(Rsmn) ('000 tonnes) LPG Volume
16.8%
9,000 18% 550
8,000 16% 500
7,000 14% 450
10.7% 10.6% 10.4% 400
6,000 10.0% 12%
5,000 10% 350
7.5%
4,000 8,167 8% 300
5.2% 250
3,000 6,268 6%
4,227 200
2,000 4%
3,209 3,156 150
1,000 1,916 2,239 2%
100
- 0%
FY07 FY08 FY09 FY10 FY11E FY12E FY13E 50
FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Segmental Revenue (Rs mn) PBIT Margins (%)

Source: Company, Centrum Research Estimates Source: Company, Centrum Research Estimates

Aegis has certain competitive advantage in the gas logistics and distribution business due to its state-
of-the-art, fully refrigerated import terminal at Mumbai port. It is also one of the largest players in the
private sector, after the acquisition of Shell LPG business in India. The growth envisaged will be
achieved through the various segments in the LPG business that it operates.
Roll out of auto-gas retail outlets
Aegis plans to aggressively increase its retail presence by setting up an auto-gas retail distribution
network. The company has set up a target of 300 outlets for the next couple of years from the 68
operational stations it had at the end of FY10. In our estimates, we have assumed 95 operational
stations by the end of FY11, 132 by FY12 and 182 by FY13. We believe the roll-out could be much faster
now with the petrol prices deregulated and with the Essar alliance. Aegis entered into an alliance with
Essar Oil in FY10 to cross-sell products which will help increase sales points multi-fold for both the
franchises of Aegis and dealers of Essar Oil.
Exhibit 11: Faster roll out of retail outlets likely over FY10-13E
200 182
180
160
140 132

120
95
100
80 70
60
60
38
40
14
20
-
FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Source: Company, Centrum Research Estimates

8
Aegis Logistics
 The focus of the company has now shifted from the initial expansion of franchise (dealer-owned, dealer-
operated) model to increase the company flagship (company-owned, dealer operated) outlets for
future expansion, as the latter has capabilities of delivering higher volumes due to presence in larger
towns and cities.
Increasing demand from Reliance Industries to boost thru-put volumes
We believe that the long term relationship with one of its key customers – Reliance Industries’s petchem
division (erstwhile IPCL) would help Aegis boost volumes in the gas logistics business. Reliance has
recently re-entered into a long-term contract with Aegis for storage and thru-put of a minimum 120,000
tonnes of propane per annum through the latter’s terminal in Mumbai. Reliance’s cracker at Nagothane
is connected by a 72 km long submarine pipeline from Aegis LPG terminal at Mumbai. Reliance-IPCL
earlier had a 10-year contract for the import of upto 100,000 tonnes p.a. of propane through the
terminal which ended in 2008.
Reliance which was earlier importing propane which is a feedstock for ethylene at its cracker, now plans
to use the by-product from its recently commisioned refinery in Jamnagar. It will ship propane out of
Jamnagar through coastal movement to Mumbai Port and use Aegis’ terminal which is connected to its
cracker via pipeline. It has also undertaken refurbishment of the pipeline to increase its capacity to be
able to handle higher volumes due to increasing demand.
Acquisition of Shell Gas to expand and de-risk gas business
The acquisition of Shell Gas will help diversify Aegis’ LPG business into the commercial packaged
cylinder business apart from providing an additional terminal at Pipavav – a new and growing port in
the western coast of India. With this acquisition, Aegis became the second largest private sector player
in the LPG terminal and handling business in India. This would also help Aegis reduce its high
dependence on Mumbai Port, where it has its sole LPG terminal.
Aegis Gas, as the subsidiary is now called, currently has a network of 40 distributors for the commercial
cylinder business in the states of Gujarat and Maharashtra. Aegis intends to expand this business to
other states (Rajasthan, AP, Karnataka, etc) where it has a strong presence through its retail auto-gas
dealers.
Aegis acquired a 100% stake in Shell Gas (LPG) India Pvt. Ltd. along with its existing gas business based
at Pipavav, Gujarat in April 2010. The company had a gas infrastructure facility and a bottling plant in
Gujarat and imports and markets LPG, including packed LPG in the industrial and commercial sectors.
The facility is a dedicated LPG import and storage facility with a captive storage of 2,700 tonnes and a
handling capacity of 60,000-70,000 tpa.
Exhibit 12: Aegis Gas (erstwhile Shell) to aid revenue growth through newer business
(Rsmn)
10,500

9,000
2,236
Aegis Gas (Shell) to 7,500
contribute 20% and 24% 1,461
of total revenues in FY12E 6,000
and FY13E respectively
4,500 794
5,931
4,807
3,000
3,209 3,156 3,433
2,239
1,500 1,916
488 683 706 810 835 926 1,050
-
FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Liquid Logistics Gas Div (inc Auto Gas) Aegis Gas (Shell)

Source: Company, Centrum Research Estimates

Being located at a new port, the terminal has free land attached to it and the advantage of acquiring
additional land being easily available. This makes it an ideal location for Aegis to expand its liquid
handling expertise into this port by setting up a green-field liquid storage and handling facility.

9
Aegis Logistics
 Financial Analysis
45% revenue growth driven by gas segment
Aegis clocked 18.5% revenue CAGR over FY06-10, while its bottom-line registered 9.3% CAGR over the
44.6% revenue CAGR over
same period. We forecast a 44.6% top-line CAGR over FY10-13E to Rs9,2166mn, fuelled mainly by
FY10-13E on back of volume growth in the gas division. We expect 53.9% CAGR in gas distribution revenue vs 9.0% CAGR in
53.9% growth in the gas liquid logistics revenue over FY10-13E.
division’s revenue
In our estimates for the retail auto-gas business, we have assumed 95 operational stations by the end of
FY11, 132 by FY12 and 182 by FY13. We believe the roll-out can be much faster now with the petrol
price deregulation and with the Essar alliance. Any increase in the number of auto-gas stations would
provide further upside to our revenue and earnings estimates. We have also not factored in any
inorganic growth opportunities that the company might pursue or any revenues or costs connected
with its entry into newer business opportunities like crude oil storage, bunkering and jet fuel logistics.
Exhibit 13: 44.6% revenue CAGR over FY10-13E
(Rsmn)
10,000
9,000
8,167
8,000 44.6% CAGR
7,000
6,268
6,000
5,000
4,227
4,000
18.5% CAGR 3,209 3,156
3,000
2,239
2,000 1,916
746 1,017
1,000
460 528 488 683 706 810 835 926 1,050
-
FY05 FY06 FY07 FY08 FY09 FY10 FY11E FY12E FY13E
Liquid Logistics Division Gas Division

Source: Company, Centrum Research Estimates

We expect the gas segment to outperform the liquid logistics division in the next few years, largely on
the back growth in growth in auto-gas business (52.9% revenue CAGR over FY10-13E) and Aegis Gas-
Shell (67.8% revenue CAGR over FY11-13). This would help LPG volumes to grow to 0.50mn tonnes at
16.5% CAGR over FY10-13E. The company is also augmenting its liquid handling capacity, which we
expect to increase to 428,000kl in FY13E (14.1% CAGR over FY10-13E) and to 528,000 KL by FY14E. We
estimate 9.0% CAGR in liquid logistics division over FY10-13E to Rs1,050mn.

Exhibit 14: 16.6% CAGR in LPG volumes over FY10-13E Exhibit 15: 14.1% CAGR in liquid storage capacity FY10-13
('000 tonnes) LPG Volume ('000 kl) Liquid Logistics Capacity
550 450
500 400
450
350
400
350 300

300 250
250 200
200
150
150
100 100

50 50
FY07 FY08 FY09 FY10 FY11E FY12E FY13E FY07 FY08 FY09 FY10 FY11E FY12E FY13E

Source: Company, Centrum Research Estimates Source: Company, Centrum Research Estimates

10
Aegis Logistics
 Gas (LPG) business to dominate revenue and earnings
The gas business’ contribution to total revenue is likely to increase to 88.6% in FY13E from 73.4% in FY10
and 66% in FY06. We expect 53.9% CAGR in gas distribution revenue vs 9.0% in liquid logistics revenues
over FY10-13E.
Exhibit 16: Segmental revenue mix changing in favour of the gas business
FY06 FY10 FY13E
Liquid Logistics
11%
Liquid Logistics
Liquid Logistics 27%
34%

Gas
66% Gas
73% Gas
89%
Rs1,545mn Rs3,049mn Rs9,216mn
Source: Company, Centrum Research Estimates

Margins to remain steady

The gas segment’s contribution increased considerably from 27.2% of consolidated EBIT in FY07 to
50.4% in FY10. We further estimate this to increase to 62.8% in FY13E on the back of the expected
growth in LPG volumes. A change in the business mix with a greater contribution from high margin
segments like auto-gas and petrochemical throughput is likely to help sustain margins going ahead.
While the liquid logistics division enjoys higher margins (45.6% EBIT margin in FY10) compared to the
gas division (16.8%), a greater contribution from the latter is expected to impact profitability margin,
which is expected to sustain at current levels. We expect operating margins to settle at 14.5% and net
margins at 9.3% in FY13E. FY10 had seen an unusual increase in margins primarily due to the decline in
the global LPG prices, while the absolute profits remained at earlier levels, leading to high margins. With
LPG prices back to normal levels, we expect the margins to sustain at 14%-15% levels.
Exhibit 17: Segmental PBIT contribution (%)
FY06 FY10 FY13E
Gas
25% Gas
Gas 63%
50%

Liquid Logistics Liquid Logistics

Liquid Logistics 50% 37%
75%

Rs365mn Rs629mn Rs1,193mn

Source: Company, Centrum Research Estimates

Exhibit 18: Higher contribution from gas business to EBIT… Exhibit 19: … leading to steady profitability margins
(Rsmn) (%)
1,400 23.5
25
1,200
20 17.7
1,000 16.7
849 14.8
14.2 14.5
800 627 15 12.4
448
600 376
345 14.0
235 10
400
100 9.8
437 463 504 9.0 9.5 9.1 9.3
200 340 337 370
267 5 7.2
- (77) (100) (127) (116) (140) (160) (160)
(200) -
FY07 FY08 FY09 FY10 FY11E FY12E FY13E FY07 FY08 FY09 FY10 FY11E FY12E FY13E

Liquid Logistics Division Gas Division Unallocable OPM NPM

Source: Company, Centrum Research Estimates Source: Company, Centrum Research Estimates

11
Aegis Logistics
 26% earnings CAGR over FY10-13E
Aegis registered 25.9% net profit CAGR over FY07-10 on back of both organic as well as inorganic
routes. We forecast net profit to grow at 25.7% CAGR over FY10-13E to Rs854mn fuelled by growth in
the gas division. We expect the gas distribution segment’s PBIT to register 31.2% CAGR vs 10.9% for the
liquid logistics over FY10-13E, leading to 23.8% CAGR in overall PBIT over the same period.
Exhibit 20: Net profit and profitability trend
(Rs mn)
900 14.1% 16%

800 14%
700 9.9% 12%
9.5% 9.1% 9.3%
600 9.0% 10%
7.1%
500 8%

400 6%
300 4%

200 2%
215 384 274 430 479 654 854
100 0%
FY07 FY08 FY09 FY10 FY11E FY12E FY13E

Net Profit NPM (RHS)

Source: Company, Centrum Research Estimates

RoE in the range of 25% - 28%

We expect consolidated return ratios to improve with better capacity utilisation in the gas division and
the Kochi Liquid terminal. We estimate RoE to improve to 28.4% in FY13 from 24.1% during FY10 and
RoCE to increase to 24.9% in FY13 from 17.1% in FY10 on the back of higher contribution to profits from
the gas business. The gas division’s RoCE is significantly higher compared to the logistics business as
investment required is lower and the segment’s growth is without significant capacity expansion.
This is evident from the 1.4x increase in capital employed over FY10-13E while EBITDA and PAT is
growing around 2x leading to the huge improvement in the return ratios.

Exhibit 21: Segmental return on assets (%) Exhibit 22: Consolidated return ratio trend (%)
(%) (%)
40 30 28.3 28.4
35.4
33.8 26.8
35 32.8
28.8 26 24.1 23.7
30
25 20.0 24.9
22 19.9
18.0
20 24.2 21.8
14.2 13.8 17.1
20.5 13.8 18 20.5
15
17.2
17.1 17.6
10
14 15.7
5 13.8
- 10
FY05 FY06 FY07 FY08 FY09 FY10 FY07 FY08 FY09 FY10 FY11E FY12E FY13E

Liquid Logistics Division Gas Division RoE RoCE

Source: Company, Centrum Research Source: Company, Centrum Research Estimates

12
Aegis Logistics
 Strong cash flows, healthy balance sheet
Aegis has been generating positive cash flows from operations over the last several years. This has
enabled the company to maintain low levels of debt and high dividend payouts, despite having used
both organic and inorganic strategies for its growth in the past.
The healthy balance-sheet enabled the company to enhance shareholders value by undertaking a buy-
back programme of 1mn shares (5.2% of outstanding shares) in FY10 (Aug-09 to Feb10) and also issued
a bonus in the 2:3 ratio in FY11 (Aug-10) by capitalization of Rs125.4mn general reserves.
We believe its strong balance sheet and good cash position in its books will aid the company in its
capex plans of current business and enabling futures organic and inorganic growth opportunities.
Exhibit 23: Low debt-equity ratio would enable Aegis leverage if required
(Rs mn) (x)
500 0.7 0.8
0.7
0.7
Debt to equity ratio to 0.6 0.6
come down to 0.1x by 400 0.6
FY13E
0.5
0.4
300 0.4
0.3
0.3

200 0.1 0.2

0.1
224 235 335 293 389 373 466
100 0.0
FY07 FY08 FY09 FY10 FY11E FY12E FY13E

Cash Debt to Equity (RHS)

Source: Company, Centrum Research Estimates

High dividend payout

The company has consistently maintained its high dividend payout ratios over the last few years. We
believe one factor responsible for the same is the consistent cash flow generation. This was evident
during FY09 when the earnings had declined 27.9% over FY08 and the company had to postpone its
capex plans on account of the economic slowdown, the management thought it prudent to increased
the payout ratio and enrich the shareholders. We expect the company to maintain its dividend pay-out
going ahead despite its capex plans which we believe is possible due to high cash flow generation.
Exhibit 24: Dividend pay-out likely to be maintained due to high cash generation
(Rs) (%)
7.0 40.4 45
40
6.0
29.4 35
5.0 27.3 26.8
25.2 25.8 30
4.0 22.1 25

3.0 20
15
2.0
10
1.0
5
1.3 2.9 3.0 3.4 3.5 4.5 6.0
- -
FY07 FY08 FY09 FY10 FY11E FY12E FY13E

DPS (Rs) Dividend Payout (%)

Source: Company, Centrum Research Estimates

13
Aegis Logistics
 Valuation Analysis
Earnings growth to drive stock performance ahead
At CMP, the stock trades at 14.5x FY12E and 11.1x FY13E earnings. On EV/EBITDA, the stock trades at
9.3x and 7.2x, respectively. On a one-year rolling forward basis, the stock trades at 17.6x P/E and 10.7x
EV/EBIDTA. We believe these valuations are justified on back of the high earning growth expected and
better return ratios vs peers.
We estimate Aegis’ RoCE to improve from 17.3% in FY10 to 24.9% in FY13E and RoE from 24.3% in FY10
to 28.4% in FY13E. Revenue is expected to register 44.6% CAGR over FY10-13E, while earnings are likely
to increase by 25.7% CAGR over the same period.

Initiate without Rating

We believe that the stock is likely to sustain current valuations and are justified on back of the high
earning growth expected over the next couple of years and much better return ratios vs. peers. While
Container Corp (Concor) trades at premium valuations of 1-year rolling forward multiples of 19.x P/E
and 12.5x EV/EBIDTA, its return ratios (RoE) at 18.0% for FY12 is much lower than that of Aegis at 26.8%.
However, the premium is justified given its large size and market leadership position.
The upside risk to our call is the faster-than-expected roll out of auto-gas stations which could increase
our revenue and earnings estimates. We have also not factored in any inorganic growth opportunities
that the company might pursue. The company is planning to enter into newer business opportunities
like crude oil storage, bunkering and jet fuel logistics, which have not been taken into our estimates.

Exhibit 25: Valuations multiples likely to sustain on back of healthy fundamentals (One-year rolling forward multiples)
(Rs) P/E (Rs) EV/EBITDA
600 600
20x
500 500 12x

16x 10x
400 400

12x 8x
300 300
6x
200 8x 200

100 100

- -
Apr-05

Oct-05

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12

Apr-05

Oct-05

Apr-06

Oct-06

Apr-07

Oct-07

Apr-08

Oct-08

Apr-09

Oct-09

Apr-10

Oct-10

Apr-11

Oct-11

Apr-12
Source: Bloomberg, Centrum Research Estimates

Stocks in the logistics sector trade in the range of 12-18x FY12 P/E. Container Corporation of India
(Concor) trades at premium valuations of 18.0x FY12E due to its market leadership and strong balance
sheet position. RoCE is in the range of 11.4% for Gateway Distriparks (GDL) in FY12 at the lower end and
18.0% for Concor in FY12, at the higher end. Currently Aegis trades at P/E of 14.9x FY12E EPS and at 9.5x
EV/EBITDA, a bit higher than GDL’s 11.2x and Allcargo’s 11.6x as it enjoys relatively higher RoCE of
21.8% in FY12. Also the earnings growth expectations over FY10-FY12 for Concor are 9.2%, GDL – 13.0%
and Allcargo – 21.8%; lower than the 23.3% estimated for Aegis Logistics.
Exhibit 26: Peer valuation
CMP M Cap 1-yr forward (x) P/E (x) RoE (%) RoCE (%)
Company (Rs) (Rsmn) P/E EV/E FY10 FY11 FY12 FY10 FY11 FY12 FY10 FY11 FY12
Concor 1,292 167,934 19.0 12.5 21.3 19.8 17.9 19.4 18.3 18.0 19.4 18.3 18.0
Allcargo* 167 21,789 12.1 7.0 16.8 13.9 11.3 16.3 14.2 14.5 13.8 13.0 13.3
GDL 105 11,330 12.6 7.4 14.4 13.7 11.2 12.2 12.1 13.8 11.1 10.6 11.4
TCI 138 10,009 18.6 9.2 22.6 19.7 17.0 16.8 17.0 17.2 9.6 10.5 11.5
Aegis 302 9,464 17.2 10.7 22.0 19.8 14.5 24.3 23.7 26.8 17.3 17.6 21.8
Note: Allcargo data for CY09, CY10E and CY11E, prices as on 27 August 2010
Source: Company, Centrum Research Estimates

14
Aegis Logistics
 Key Risks
Diversion of liquid traffic to other major ports
Under the National Maritime Development Programme (NMDP), the government plans to modernise
and upgrade existing ports while developing new ports through public private partnership. These ports
are being developed by private players in association with leading global port developers and would
have good infrastructure to support movement of traffic through them. Some of these newer modern
ports along the western coasts have deep draft which is capable of handling large vessels along with all
weather cargo handling capabilities. These can pose high competition to older ports like Mumbai which
have limited space to increase capacities. As such there might be some diversion of traffic from existing
ports like Mumbai Port to these newer ports and impact Aegis volume through-put.

Rise in crude oil prices coupled with continued petrol subsidy may make use of auto-gas unviable
Historically, petrol and diesel were subsidised by the government due to political considerations. Retail
prices were fixed by the Central government and were not linked to the global crude prices. However,
recently (June-2010) in a major policy reform, the government decided to partially de-regulate the
sector by making prices of petrol market driven at retail level. This would help auto-gas remain
competitive when crude prices go up, as oil companies would also increase petrol prices to remain
profitable.

Diversion of domestic LPG to automotive fuel

Domestic LPG, which is subsidised in India, poses a great threat to auto-gas and commercial gas
suppliers like Aegis. Even though use of domestic gas for commercial and automotive fuel is illegal, the
cost economics is huge and compelling.
We believe that in the past LPG was freely available in most cities, which made its easy for diversion as
auto fuel. However, in the current scenario, oil companies have tightened their supplies which have
made it difficult for people to divert their domestic gas. Also we believe that use of illegal gas will
reduce with increasing public awareness over time and growth of auto-gas dispensing stations making
it easily available across the country.
Environmental concerns
The company is involved in handling of hazardous materials like chemicals, petroleum products and gas
at a port which is part of a large city (Mumbai). Hence, any disaster while handling/use of these products
can lead to a threat to a large number of lives. This could involve huge losses relating in curtailing the
disaster and environmental penalties levied by the government apart from impacting the company's
business. However, we believe given that the company has been operational since 1956 and caters to
large PSUs, it has all safety regulations in place (OHSAS 18001 certified) and is unlikely to get hampered
on environmental grounds. The terminal has ISO 9001-2000 Quality Management System (QMS) and
ISO 14001-1996 Environmental Management System (EMS) certification.

15
Aegis Logistics
 Annexure
Company Background
Aegis Logistics operates in a niche segment of the logistics value chain. The services include port-
handling, storage, transportation and distribution of oil, gas and chemical products. It has over 30 years
of experience in handling chemical and petroleum products. The company also imports, stores and
distributes gases such as LPG and propane for bulk industrial users, retail auto fuel and commercial
packaged cylinder business.

The company primarily has two business segments

1. Liquid logistics division
o Third Party Liquid Logistics (3PL)
o O&M Contracts
2. Gas division
o 3PL gas logistics (3PL)
o Bulk industrial gas distribution
o Auto-gas retailing
o Packed LPG cylinders for commercial and industrial segments

Exhibit 27: Business overview

Aegis Logistics (FY10)

Revenue: Rs3,057mn

Liquid Logistics Division Gas Division (LPG)

Rs815mn 26.7% Rs2,242mn 73.3%

Tank storage and terminal

handling Storage & handling Distribution
Industrial &
Retail
(Auto LPG)

PBIT margin PBIT Margin

Rs370mn 45.4% Rs376mn 16.8%

Net Profit Margin

Rs430mn 14.1%

Source: Company, Centrum Research

16
Aegis Logistics
 Liquid logistics division
Aegis provides integrated supply chain management services for the oil and chemical industry. It
currently operates 3 liquid terminals at 2 ports with total capacity of 288,000 KL. It owns and operates a
large tank farm over a 20-acre land in Mumbai (Mahul, Trombay) which is connected with three jetties at
Offers integrated supply
chain services to importers Mumbai Port. Mumbai port is strategically located on the western coast and is in the heartland of India's
and exporters of liquid oil, chemical and petrochemical belt of Gujarat and Maharashtra. It is also involved in O&M of third party
chemicals and petroleum facilities. Though this service currently has a very low contribution to overall revenues, it is critical from
products the relationship with clients which have high confidence on Aegis’ ability to manage liquid storage
facilities efficiently.
The company boasts of marquee clients that include large oil major like BPCL, HPCL, Reliance Industries,
MNC trading houses like Noble Group and domestic chemical industry like HUL, Supreme Industries,
etc. The division is capable of handling a variety of petroleum products and specialty chemicals like
naphtha, diesel, motor spirit, LSHS (Low sulphur heavy stock), caustic soda, etc.
The business of liquid logistics terminal works on a rental based revenue model plus handling and other
service charges. The average revenue based on the product handled varies from Rs200-400 per kl pm,
while the capital cost is around Rs8-10mn per 1,000 kl capacity.
Exhibit 28: Flow of cargo in liquid logistics operations

Port & terminal Pipeline transfers Storage, custom Distribution by

handling (receipt of of cargo from jetty clearance and road transport,
cargo and jetty to tank farm documentation pipeline or coastal
operations) shipping

Note: Picture for representation purpose only, not actual pictures

Source: Company, Centrum Research

Gas (LPG) logistics and distribution division

Under this division, Aegis provides logistics services for importers of LPG (liquefied petroleum gas) and
Aegis operates LPG terminal propane. It operates 2 gas terminals at 2 ports (Mumbai and Pipavav ports). It owns and operates a large
capable of handling 500,000 gas terminal at Mumbai Port consisting of two fully-refrigerated tanks of 10,000 tonnes capacity each.
tonnes annually The second gas terminal which Aegis acquired recently from Shell Gas (India) is at Pipavav Port, Gujarat
and has a storage capacity of 2,700 tonnes. The company with these two terminals is capable of
handling 500,000 tonnes of LPG annually.
Exhibit 29: LPG business segments
Auto-gas

Bulk Industrial 3PL - Gas Logistics

Commercial Cylinders Domestic Cylinders

Source: Company, Centrum Research

17
Aegis Logistics
 Aegis offers ‘Third Party Logistics’ (3PL) services to importers of LPG on an open user terminal basis. The
services include port-handling, storage and redistribution of the gas. Its key clients include oil PSUs like
HPCL, BPCL and private players like IPCL (division of Reliance Industries).
Exhibit 30: LPG storage terminals
Cryogenic tanks at Mumbai Spherical tanks at Pipavav

Source: Company, Centrum Research

Aegis also imports, markets and distributes LPG in India through its terminals in Mumbai and Pipavav.
The company distributes bulk propane and LPG to industrial customers in western India. Its customers
are primarily SMEs in the glass manufacturing, auto component and ceramic industries.
In order to grow its LPG business, it forayed into auto gas retailing business in FY06. Currently it has 70
operational auto-gas dispensing outlets spread across 8 western and southern states in India, through
which it retails LPG as an automotive fuel. With the 100% acquisition of Shell Gas (LPG) India’s business
in April 2010, Aegis entered into the commercial LPG cylinders business. It distributes packed LPG
cylinders for commercial and industrial user through a network of 40 distributors across Maharashtra
and Gujarat.
Exhibit 31: LPG distribution business
Auto-gas dispensing retail outlet in Gujarat Industrial gas distribution

Source: Company, Centrum Research

18
Aegis Logistics
Financials - Consolidated
Exhibit 32: Income Statement Exhibit 34: Cash flow
Y/E March (Rsmn) FY09 FY10 FY11E FY12E FY13E Y/E March (Rsmn) FY09 FY10 FY11E FY12E FY13E
Revenue 3,862 3,049 5,062 7,194 9,216 Profit after Tax 274 430 479 654 854
YoY growth (%) (1.0) (21.0) 66.0 42.1 28.1 Depreciation 135 143 167 182 203
Material Cost 2,742 1,678 3,442 5,118 6,643 Provision for deferred tax (26) (9) 4 4 4
% of Sales 71.0 55.0 68.0 71.1 72.1 Misc Items 0 0 0 0 0
Employee cost 156 197 248 345 433 CF bf WC change 383 565 650 840 1,061
% of Sales 4.0 6.5 4.9 4.8 4.7 Working capital adj 217 (283) 22 (168) (125)
Other op expenses 171 190 192 218 255 Cash from operation 601 282 671 672 936
% of Sales 4.4 6.2 3.8 3.0 2.8 Capex (73) (453) (285) (345) (415)
Administrative expenses 245 266 334 446 553 Investments (279) 101 29 (20) 0
% of Sales 6.3 8.7 6.6 6.2 6.0 Cash from investing (353) (352) (255) (365) (415)
Total expenditure 3,314 2,331 4,216 6,128 7,884 Borrowings/ (repayments) (94) 334 (380) (196) (263)
EBITDA 548 718 846 1,066 1,332 Proceeds from sh capital (1) (141) 0 0 0
EBITDA margin (%) 14.2 23.5 16.7 14.8 14.5 Dividend paid (inc div tax) (53) (165) (66) (128) (165)
Depreciation 135 143 167 182 203 Cash from financing (148) 29 (446) (324) (428)
Interest expenses 104 86 90 70 48 Net Cash inc/ (dec) 100 (41) (29) (17) 93
Other income 36 50 30 30 25 Opening Cash Balance 235 335 293 264 247
Share of P/(L) of associate (4) 4 0 0 0 Closing Cash Balance 335 293 264 247 340
PBT 341 543 619 844 1,105
Provision for tax 67 113 140 190 252 FCF to firm (FCFF) 528 (171) 387 327 521
Effective tax rate (%) 19.7 20.8 22.6 22.5 22.8 FCF per share 27 (9) 12 10 17
Profit after tax 274 430 479 654 854
Source: Company, Centrum Research Estimate
YoY growth (%) (28.7) 57.0 11.2 36.6 30.5
PAT margin (%) 7.1 14.1 9.5 9.1 9.3
Exhibit 35: Key Ratios
Source: Company, Centrum Research Estimate
Y/E March FY09 FY10 FY11E FY12E FY13E
Exhibit 33: Balance Sheet O/s shares mn (FV Rs10) 19.8 18.8 31.3 31.3 31.3
Y/E March (Rsmn) FY09 FY10 FY11E FY12E FY13E Per share (Rs)
Equity Share Capital 198 188 313 313 313 Fully diluted EPS 8.7 13.7 15.3 20.9 27.2

Reserves & Surplus 1,493 1,660 1,885 2,374 3,007 CEPS 13.1 18.3 20.6 26.7 33.7

Net worth 1,691 1,847 2,198 2,687 3,320 BVPS 54.0 59.0 70.1 85.7 106.0
Dividend ratios
Secured Loans 897 1,205 869 683 425
Unsecured Loans 47 74 30 20 15 DPS (Rs) 3.0 3.4 3.5 4.5 6.0
Dividend yield (%) 1.0 1.1 1.2 1.5 2.0
Total Loan Funds 944 1,279 899 703 440
Deferred Tax Liability 210 201 205 209 213 Dividend payout (%) 40.4 29.4 26.8 25.2 25.8
Turnover ratios (days)
Total Capital Employed 2,846 3,327 3,302 3,599 3,974
Gross Block 3,075 3,197 3,707 4,027 4,477 Debtors turnover 31.3 27.9 21.9 22.4 20.8
Creditors turnover 50.2 56.4 40.2 39.2 37.9
Accumulated Depreciation 965 1,105 1,322 1,505 1,708
Net Block 2,110 2,091 2,384 2,522 2,769 Working cap turnover 27.4 40.9 30.6 21.6 22.3
Return ratios (%)
Capital WIP 72 400 225 250 215
Net Fixed Assets 2,182 2,492 2,609 2,772 2,984 RoE 16.9 24.3 23.7 26.8 28.4
RoCE 13.7 17.3 17.6 21.8 24.9
Goodwill on acquisition 125 125 125 125 125
Investments 337 229 200 220 220 Solvency ratios
Debt/ Equity (x) 0.6 0.7 0.4 0.3 0.1
Inventories 60 104 141 199 255
Sundry debtors 247 218 388 493 555 Interest coverage (%) 17.8 11.1 10.3 6.4 3.6
Valuation ratios (x)
Cash and bank 335 293 264 247 340
Loans and advances 189 381 405 590 783 P/E 34.5 22.0 19.8 14.5 11.1
P/BV 5.6 5.1 4.3 3.5 2.9
Total current assets 831 997 1,198 1,529 1,934
Current liabs & prov 629 516 830 1,047 1,289 EV/EBITDA 18.4 14.6 11.9 9.3 7.2

Net Current Assets 202 481 368 482 645 EV/Sales 2.6 3.4 2.0 1.4 1.0

Total Assets 2,846 3,327 3,302 3,599 3,974 M-cap/ Sales 2.5 3.1 1.9 1.3 1.0

Source: Company, Centrum Research Estimate Source: Company, Centrum Research Estimate

19
Aegis Logistics
Appendix A
Disclaimer
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The projections and forecasts described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies.
Projections and forecasts are necessarily speculative in nature, and it can be expected that one or more of the estimates on which the projections and forecasts were based will not
materialize or will vary significantly from actual results, and such variances will likely increase over time. All projections and forecasts described in this report have been prepared solely by
the authors of this report independently of the Company. These projections and forecasts were not prepared with a view toward compliance with published guidelines or generally
accented accounting principles. No independent accountants have expressed an opinion or any other form of assurance on these projections or forecasts. You should not regard the
inclusion of the projections and forecasts described herein as a representation or warranty by or on behalf of the Company, Centrum, the authors of this report or any other person that
these projections or forecasts or their underlying assumptions will be achieved. For these reasons, you should only consider the projections and forecasts described in this report after
carefully evaluating all of the information in this report, including the assumptions underlying such projections and forecasts.
The price and value of the investments referred to in this document/material and the income from them may go down as well as up, and investors may realize losses on any investments.
Past performance is not a guide for future performance. Future returns are not guaranteed and a loss of original capital may occur. Actual results may differ materially from those set forth
in projections. Forward-looking statements are not predictions and may be subject to change without notice. Centrum does not provide tax advice to its clients, and all investors are
strongly advised to consult regarding any potential investment. Centrum and its affiliates accept no liabilities for any loss or damage of any kind arising out of the use of this report.
Foreign currency denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of or income derived from the investment. In
addition, investors in securities such as ADRs, the value of which are influenced by foreign currencies effectively assume currency risk. Certain transactions including those involving
futures, options, and other derivatives as well as non-investment-grade securities give rise to substantial risk and are not suitable for all investors. Please ensure that you have read and
understood the current risk disclosure documents before entering into any derivative transactions.
This report/document has been prepared by Centrum, based upon information available to the public and sources, believed to be reliable. No representation or warranty, express or
implied is made that it is accurate or complete. Centrum has reviewed the report and, in so far as it includes current or historical information, it is believed to be reliable, although its
accuracy and completeness cannot be guaranteed. The opinions expressed in this document/material are subject to change without notice and have no obligation to tell you when
opinions or information in this report change.
This report or recommendations or information contained herein do/does not constitute or purport to constitute investment advice in publicly accessible media and should not be
reproduced, transmitted or published by the recipient. The report is for the use and consumption of the recipient only. This publication may not be distributed to the public used by the
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this document nor any copy of it may be taken or transmitted into the United State (to US persons), Canada, or Japan or distributed, directly or indirectly, in the United States or Canada or
distributed or redistributed in Japan or to any resident thereof. The distribution of this document in other jurisdictions may be restricted by law, and persons into whose possession this
document comes should inform themselves about, and observe, any such restrictions. Neither Centrum nor its directors, employees, agents or representatives shall be liable for any
damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
This document does not constitute an offer or invitation to subscribe for or purchase or deal in any securities and neither this document nor anything contained herein shall form the
basis of any contract or commitment whatsoever. This document is strictly confidential and is being furnished to you solely for your information, may not be distributed to the press or
other media and may not be reproduced or redistributed to any other person. In particular, neither this document nor any copy thereof may be taken or transmitted into the United
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The distribution of this report in other jurisdictions may be restricted by law and persons into whose possession this report comes should inform themselves about, and observe any such
restrictions. By accepting this report, you agree to be bound by the fore going limitations. No representation is made that this report is accurate or complete.
The opinions and projections expressed herein are entirely those of the author and are given as part of the normal research activity of Centrum Broking and are given as of this date and
are subject to change without notice. Any opinion estimate or projection herein constitutes a view as of the date of this report and there can be no assurance that future results or events
will be consistent with any such opinions, estimate or projection.
This document has not been prepared by or in conjunction with or on behalf of or at the instigation of, or by arrangement with the company or any of its directors or any other person.
Information in this document must not be relied upon as having been authorised or approved by the company or its directors or any other person. Any opinions and projections
contained herein are entirely those of the authors. None of the company or its directors or any other person accepts any liability whatsoever for any loss arising from any use of this
document or its contents or otherwise arising in connection therewith.

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Aegis Logistics
 Key to Centrum Investment Rankings
Buy: Expected outperform Nifty by>15, Accumulate: Expected to outperform Nifty by +5 to 15, Hold: Expected to outperform
Nifty by -5 to +5, Reduce: Expected to underperform Nifty by 5 to 15, Sell: Expected to underperform Nifty by>15

Centrum Broking Private Limited

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Manager
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Website: www.centrum.co.in
Investor Grievance Email ID: investor.grievances@centrum.co.in

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Aegis Logistics