GICS Industry : Gas Utilities l Sub Industry : Gas Utilities l Website : www.aegisindia.

com

Aegis Logistics Ltd

Key Stock Indicators
NSE Ticker : Bloomberg Ticker : Face value / Share: Div. Yield (%): AEGISCHEM AGIS:IN 10.0 1.9 CMP (as on 21 Feb 2011Rs/share): 52-week range up to 21 Feb 2011 (Rs)(H/L): Market Cap as on 21 Feb 2011 (Rs mn): Enterprise Value as on 21 Feb 2011 (Rs mn): Div. Yield (%): 0.0 291.7 522.00/184.95 9,123 10,108 Shares outstanding (mn) : Free Float (%) : Average daily volumes (12 months) : Beta (2 year) : 31.3 33.3 286,247 1.1

Incorporated in 1956, Aegis Logistics Limited (Aegis) is engaged in providing logistic services to importers and exporters of oil, gas, chemicals and petrochemical products at Mumbai and Kochi ports. Aegis is primarily engaged in 2 broad segments liquid terminal services and gas storage and distribution.

Key Financial Indicators

Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgins (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m. : Not meaningful

KEY HIGHLIGHTS
Leading provider of integrated logistic services at Mumbai and Kochi ports Aegis is a leading provider of terminal and logistics services to importers and exporters of oil, chemicals, and petroleum products. The company has a strong presence in the liquid terminal service space at the 2 ports it offers pipeline connectivity to 6 jetties to load and unload liquid cargo, and has 66 storage tanks. Its terminal at the Mumbai port has 46 tanks for stocking products, in addition to facilities for transportation of products. Aegis also offers pipeline connectivity to 1 jetty and 20 tanks at the Kochi port. Healthy revenue diversity Aegis handles 40-50 types of chemicals and caters to a diverse customer base with no single customer accounting for more than 10% of revenue. The acquisition of Konkan Storage Systems (Kochi) Pvt Ltd (KCPL) with facilities at Kochi port and capacity expansion on land allotted at Haldia port will lend geographical diversity to the revenue profile of the company. Also, Aegis revenue profile in the gas storage and distribution business improved on account of its acquisition of the gas logistic service business of Hindustan Aegis LPG Ltds (HALPG) and the expansion of the auto LPG business. This product and customer diversity has resulted in de-risking the companys business profile, besides providing revenue stability. Deal signed with APM Terminals In November 2010, Aegis entered into a major deal with APM Terminals to avail close to 100 acres of land on sub-lease for building a global oil and petrochemicals storage complex at the Pipavav port. The company plans to invest ~Rs 4 billion (bn) to build a 600,000 kilolitre (KL) oil terminal complex at Pipavav. This complex is under construction, its completion will take Aegiss liquids capacity to over 1 million (mn) KL from 300,000 KL. With these facilities in place, Aegis will be able to offer a comprehensive portfolio of facilities for a large variety of cargo.

Mar-08 3,898.5 17.9 381.7 9.8 0.7 19.2 10.5 2.8 26.9 31.0 6.9

Mar-09 3,869.6 14.9 274.0 7.1 0.6 16.7 3.5 0.6 16.9 18.3 2.7

Mar-10 3,057.2 24.7 430.3 14.1 0.7 22.9 12.7 3.2 21.9 26.2 8.5

Shareholding (As on September 30, 2010)

FII 7% Others 27%

KEY RISKS

Promoter 66%

Revenue is dependent upon volume growth in exports and imports of petroleum products and chemicals at the Mumbai and Kochi ports Fluctuations in international prices of LPG Change in government polices with respect to excise, customs and regulation in the oil sector Competition from low-quality local terminals in the LPG business

Indexed price chart

(index) 400 350 300 250 200 ('000) 2500 2000 1500 1000 500 0 Nov-10 Apr-10 Mar-10 May-10 Dec-10 Aug-10 Feb-10 Sep-10 Oct-10 Jun-10 Jul-10 Jan-11 NIFTY

Stock Performances vis--vis market

Returns (%) YTD AEGISCHEM NIFTY
Note: 1) YTD returns are since April 1, 2010 to Feb 21, 2011. 2) 1-m, 3-m and 12-m returns are up to Feb 21, 2011.

150 100

1-m 0 -3

3-m -17 -8

12-m 154 14

125 4

50 0

Volumes (RHS)

AEGISCHEM

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Aegis Logistics Ltd

BACKGROUND
Aegis is a leading provider of terminal and logistics services to importers and exporters of oil, chemicals and petroleum products at the Mumbai and Kochi ports. Oil PSUs are among its key clients. The company operates under 2 divisions, viz liquid terminal division and gas terminal division. The gas terminal division contributed ~73% to total FY10 revenues, while liquid terminal division contributed ~27%. Aegis presently has 3 operating port terminals 2 in Mumbai and 1 in Kochi and 2 gas terminals at Mumbai and Pipavav through which it handles over 2 million tonnes of oil, gas and petroleum products as well as ~400,000 tonnes of LPG and propane gas per year. Aegis also runs a gas storage and distribution business, which includes import and distribution of LPG, propane, gas logistics services and retailing of autogas under the Aegis Autogas brand through dealer owned-dealer operated (DODO) stations. In November 2009, Aegis entered into a strategic alliance with Essar Oil Ltd; under the pact, the companies will sell each others products through their retail outlets. Aegis Autogas facilities will be set up at Essar Oil's retail outlets, while Essars Motor Spirit/ High Speed Diesel facilities will be set up at Aegis Autogas dispensing stations. Aegis has acquired the operations of Shell Gas (LPG) India, giving it an entry into a new market segment of the large cylinder business for hotels, restaurants and industry.

COMPETITIVE POSITION
Peer Comparison

PeriodEndsOn Revenue (Rs mn) EBITDA ma rgi ns (%) PAT (Rs mn) PAT ma rgins (%) Gea ri ng (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m: Not meaningful

Aegis Logistics Ltd(Consolidated). Mar-10 3,057.2 24.7 430.3 14.1 0.7 22.9 12.7 3.2 21.9 26.2 8.5

Allcargo Global Logistics Ltd.(Consolidated) Dec-09 20,619.5 10.6 1,407.1 6.8 0.3 56.4 2.4 0.4 21.7 24.2 2.0

Gati Ltd.(Consolidated). Jun-10 9,329.9 9.4 95.0 1.0 1.8 1.1 48.5 1.8 8.9 3.8 10.2

Sical Logistics Ltd. Mar-10 7,249.8 5.0 -352.8 -4.9 4.3 3.7 19.9 0.8 0.2 n.m. 31.2

FINANCIAL PROFILE
Top-line falls by 21%, but operating margin, PAT improve

Key Financial Indicators Units Revenue Rs mi ll ion Rs mi ll ion Per cent Per cent Per cent Times Per cent Per cent EBITDA ma rgins Per cent PAT PAT ma rgins EBITDA growth PAT growth Gea ring RoCE RoE

Mar-08
3,898.5 17.9 381.7 9.8 62.0 131.0 77.1 0.7 26.9 31.0

Mar-09
3,869.6 14.9 274.0 7.1 -0.7 -17.4 -28.2 0.6 16.9 18.3

Mar-10
3,057.2 24.7 430.3 14.1 -21.0 31.1 57.0 0.7 21.9 26.2

Top-line declined by ~21% year-on-year to Rs 3 bn in FY10, mainly because gas terminal division revenues fell ~29%. In value terms, revenue was higher in FY09, as volatility in international gas prices saw the commodity move between USD 460 and USD 800 per tonne. Gas prices stabilised during FY10, which affected revenue in value terms in FY10. However, operating margin improved by ~980 basis points to 24.7%, from 14.9% in FY09. This increase was mainly on account of a ~39% reduction in material cost as compared to FY09. PAT grew by 57% to Rs 430 mn in FY10, from Rs 274 mn in FY09, on account of higher operating profit, reduction in interest cost and increase in other income.

Revenue growth Per cent

INDUSTRY PROFILE
Logistics CRISIL Research has estimated the overall Indian logistics spend at Rs 2.7 trillion in 2008-09, which includes only primary transport modes and infrastructure, equivalent to around 8.2 per cent of the Gross Domestic Product (GDP). And if the secondary movement (from the hub to the various depots) is also included, this shoots up to 10.7 per cent, which is significantly higher than those of developed nations where it averages 5-7 per cent. Higher logistics spend as percentage of GDP can be attributed to the overall inefficiency in logistics operations, multiple tax structures, inadequate infrastructure and unorganised nature of the industry in India. With escalating competition and cost pressures, companies are increasingly focusing on their core competencies by outsourcing their logistics requirements to third party logistics (3 PL) players. The future of the Indian logistics industry is currently governed by three keyfactors viz. increasing domestic demand, reducing logistics cost and improvement in Infrastructure.

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Aegis Logistics Ltd

ANNUAL RESULTS
Income Statement (Rs million ) Net Sales Operating Income EBITDA EBITDA Margin Depreciation Interest Other Income PBT PAT PAT Margin No. of shares (Mn No.) Earnings per share (EPS) Cash flow (Rs million ) Pre-tax profit Total tax paid Depreciation Change in working capital Cash flow from operating activities Capital Expenditure Investments and others Balance sheet (Rs million ) Equity share capital Reserves and surplus Tangible net worth Deferred tax liablity:|asset| Long-term debt Short-term-debt Total debt Current liabilities Total provisions Total liabilities Gross block Net fixed assets Investments Current assets Receivables Inventories Cash Total assets Ratio Mar-08 502.7 45.5 120.7 -33.7 635.2 -944.6 -47.3 Mar-09 360.5 -91.0 136.2 275.4 681.1 -73.1 -259.7 Mar-10 553.7 -122.8 143.3 -321.0 253.2 -453.4 108.1 Revenue growth (%) EBITDA growth(%) PAT growth(%) EBITDA margins(%) Tax rate (%) PAT margins (%) Dividend payout (%) Dividend per share (Rs) BV (Rs) Return on Equity (%) Return on capital employed (%) Gearing (x) Interest coverage (x) Debt/EBITDA (x) Asset turnover (x) Current ratio (x) Gross current assets (days) Mar-08 62.0 131.0 77.1 17.9 5.8 9.8 23.5 4.5 71.5 31.0 26.9 0.7 6.7 1.5 1.8 1.7 86 Mar-09 -0.7 -17.4 -28.2 14.9 26.9 7.1 33.9 5.7 95.1 18.3 16.9 0.6 4.8 1.6 1.3 1.8 73 Mar-10 -21.0 31.1 57.0 24.7 22.6 14.1 25.1 5.8 91.7 26.2 21.9 0.7 7.2 1.7 1.0 2.2 109 Mar-08 3,892.6 3,898.5 698.4 17.9 120.7 104.7 29.7 497.0 381.7 9.8 19.9 19.2 Mar-09 3,861.8 3,869.6 576.6 14.9 136.2 119.2 39.3 338.8 274.0 7.1 16.4 16.7 Mar-10 3,049.1 3,057.2 755.9 24.7 143.3 104.9 46.0 544.0 430.3 14.1 18.8 22.9 Mar-08 199.1 1,224.0 1,423.1 236.4 1,023.0 15.6 1,038.6 551.6 60.4 3,310.1 3,051.9 2,243.4 77.7 988.9 414.8 128.0 234.7 3,310.0 Mar-09 197.9 1,365.6 1,563.5 210.2 931.0 13.4 944.5 511.5 117.9 3,347.6 3,069.9 2,178.9 337.4 831.2 247.2 60.1 334.9 3,347.5 Mar-10 187.7 1,532.7 1,720.4 201.2 1,258.5 20.3 1,278.8 431.4 84.5 3,716.3 3,191.1 2,489.6 229.3 997.3 218.5 104.3 293.5 3,716.2

Cash flow from investing activities Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Others (incl extraordinaries)

-991.9 36.0 371.6 -104.8 64.9

-332.8 -34.6 -94.1 -110.6 -8.7

-345.3 -107.2 334.3 -126.4 -50.0

Cash flow from financing activities Change in cash position Opening cash Closing cash
n.m : Not meaningful;

367.7 11.0 223.6 234.7

-248.0 100.3 234.7 334.9

50.7 -41.4 334.9 293.5

QUARTERLY RESULTS

Profit and loss account (Rs million) No of Months Revenue EBITDA Interes t Depreci a tion PBT PAT Dec-10 3 7,314.8 223.0 18.7 40.5 166.5 121.5 100.0 3.0 0.3 0.6 2.3 1.7 % of Rev Dec-09 % of Rev 3 807.6 199.2 18.3 36.6 149.0 116.7 100.0 24.7 2.3 4.5 18.4 14.5 Sep-10 3 2,739.6 198.2 24.8 40.8 134.8 94.2 100.0 7.2 0.9 1.5 4.9 3.4 % of Rev Dec-10 % of Rev 9 11,209.4 589.0 61.4 121.6 413.1 302.5 100.0 5.3 0.5 1.1 3.7 2.7 Dec-09 9 2,282.8 573.4 62.2 108.0 406.7 316.2 100.0 25.1 2.7 4.7 17.8 13.9 % of Rev

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Aegis Logistics Ltd

FOCUS CHARTS & TABLES
Rs mn 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Dec-08 Dec-09 Sep-08 Sep-09 Mar-08 Mar-09 Mar-10 Sep-10 Jun-08 Jun-09 Jun-10

Quarterly sales & y-o-y growth

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Mar-08

Mar-09

Sales

Sales growth y-o-y (RHS)

Dec-10

Net Profit

Net profit growth y-o-y (RHS)

Rs /sha re 7 6 5 4 3 2 1 0 Dec-08

EPS

Per cent 30 25 20 15 10 5 0

Movement in operating and net margins

Dec-08

Dec-09

Mar-10

Dec-10
Dec-10 Sep-10

Sep-08

Sep-09

Sep-08

Sep-09

Jun-08

Jun-09

Mar-08

Mar-09

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Mar-08

Mar-09

Mar-10

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Jun-10

OPM

Mar-10

Shareholding Pattern (Per cent) Mar 2010 Jun 2010 Promoter 66.5 66.5 FII 2.3 2.3 DII 2.6 3.0 Others 28.6 28.2

Sep 2010 66.6 6.7 0.0 26.7

Dec 2010 66.7 6.8 0.0 26.5

Board of Directors Director Name Va s a ntra i Ha ril a l Pa ndya (Mr.) Ka poor Ma ga nla l Cha nda ri a (Mr.) Ra j Ka poor Cha nda ri a (Mr.) Ani s h Ka poor Cha nda ria (Mr.) Ani l Ma ga nl a l Cha nda ri a (Mr.) Ra til a l Premcha nd Cha nda ri a (Mr.) Ra jnika nt Jetha la l Ka ra va dia (Mr.) Dines h Jetha l a l Khima s ia (Mr.) Ka nwa l jit Suda rs ha n Singh Na gpa l (Mr.)

Designation Non-Executive Di rector Non-Executive Cha i rma n, PromoterDirector Vice Cha i rma n & Ma na ging Di rector Ma na gi ng Di rector Director Non-Executive Di rector Non-Executive Di rector Non-Executive Di rector Non-Executive Di rector

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Jun-10

NPM

Sep-10

Jun-08

Jun-09

Jun-10

Per cent 900 800 700 600 500 400 300 200 100 0 -100

Rs mn 140 120 100 80 60 40 20 0

Quarterly PAT & y-o-y growth

Per cent 200 150 100 50 0 -50 -100