Yes, hi. Thanks for the opportunity. Congratulations for a very strong quarter. The first question is basically on your profitability in the Gas division. If I just look at EBITDA on a per tonne basis, it's looking quite high at around INR 1,280. So, obviously, distribution volumes have gone up, which I think has better profitability. But could you just help explain, is this sustainable? What was the reason for such high profitability? Thank you. Murad Moledina: Yes, I will take that. See, gas distribution EBITDA was better than previous quarters. Of course, with increased volumes, you also get cost advantage when the volumes increase. So, this time, it was around INR 4,000. And we expect, I think, to sustain in ensuing quarters also. Vibhav Zutshi: Okay. Got it. That's very helpful. And just a follow-up here. This volume growth of 49% and INR 1,800. So, is it fair to say that this is broadly going to be sustainable, given the expansion that will happen? Murad Moledina: Yes. I think the distribution volumes would keep growing up. As I have said in the past, that now we have the spare capacities. We have new 2 cryogenic terminals up and running in Mangalore and Pipavav. And now we are also consolidating our Haldia LPG terminal into AVTL, a lot of synergies will come. And there is always now a room to step up on distribution volumes going forward. Vibhav Zutshi: Great. And just second question on your new projects. And if I just remember correctly, the Vadhavan Port that you talked about. So, any broad timelines that you can share? And also on ammonia beyond Pipavav, you also mentioned about Larsen & Toubro. So, just some timelines and sense around the ammonia projects and the Vadhavan Port will be very helpful. Murad Moledina: I think Vadhavan Port is just starting off, probably 5 years, but not everything is going to come at the end of 5 years. So, as the port development begins, we will also be geared up to set up our facilities as the port comes up. We are very excited. It's in our backyard and Western region, and I think the largest port probably going forward in India. So, very excited to be there doing some great infrastructure work. As far as ammonia is concerned, I think we are starting off very well in Pipavav ammonia. Let's take that first in our stride. Very quickly in the next 6 months to 8 months, we will be up and running at Pipavav. I think everything else will follow thereafter. It also gives us a very good room to get vertically integrated in ammonia business as we have done in past for LPG business. That is not just storing, but sourcing, storing and distributing ammonia going forward. So, shipping also. So, we are very excited in case of ammonia. This is not only green or we have to wait for green ammonia to happen. We are starting off with gray, but we are geared up to quickly switch gears in case green picks up. Kandla would be more of green ammonia.
Aegis Logistics Limited analyst Q&A
Great. Thank you, and all the best. Murad Moledina: Thank you. Moderator: Thank you. The next question is from the line of Mr. Vishal Mehta from IIFL Capital. Please go ahead. Vishal Mehta: Yes, hi. Congratulations on a good set of numbers. So, firstly, 2 questions on the business side, and then I have 2 questions on bookkeeping. What we hear from the APM Terminals con call for this quarter is that they seem to have maxed out on their liquid berth capacity handling at Pipavav Port, and their new berth will probably come somewhere in November, December of next year. So, does that limit our volume handling capacity at the port? Just wanted some sense there. Murad Moledina: Yes, Vishal, I think I have explained on calls earlier that it all depends how a port looks at the capacity of a jetty and how as a terminal company, we look at the capacity of the jetty. We are very particular on how we set up our ancillaries. So, it's not just the tank. What is my pipeline which I hook into the jetty, the MLA, the pumps. So, if now that VLGCs, even though it is partly loaded as on date, if they come in, how quickly can we unload and get the ship off. So, let's say, if we can unload at a speed of 1,000 tonnes an hour, in a day, a partly loaded VLGC can be unloaded and set out. A new VLGC can come the next day. So, with that as a calculation, 20,000 tonnes into 365, you make your calculation what can our capacity of jetty be. I am not saying that, that is how it actually will happen, but it's all how you look at things, but we are very careful in how we put up our ancillaries, which enable us to unload and evacuate as fast as possible so that the turnarounds happen. We are confident that there will not be a constraint till the new jetty comes in to handle the increased volume. We have already, after the cryogenic stepped up by 10%, 15% in spite of KGPL hookup still to happen.
Okay. Okay. Got it, sir. And sir, second question is on our land allotment at Haldia. Now what are the plans here? Anything that you would want to elaborate further on? Murad Moledina: Yes, the plan in Haldia, 3 acres, you can do only liquid. Liquid is what we got this allotment for. So, obviously, in 3 acres, somewhere around close to 60,000 to 100,000 depending on what kind of products we are planning to handle, should come up very quickly, yet not being taken up to the court. We have just got the allotment of the land. The process of handover will happen, and then we would immediately do that. So, yes, we keep building up. This will be the sixth Haldia terminal, already 5 are operating in Haldia. And we expect more allotment of land in Haldia and more capacities to come up. Lots of opportunities as far as East of India is concerned. Vishal Mehta: Okay. And sir, going to bookkeeping questions. Other income seems to have seen quite a jump this quarter. Any one-offs here or it's normal treasury income? Murad Moledina: No. Of course, if you can look at the segment results, you will see the interest received. So, out of the other income, interest, I believe, if I remember correctly, must be INR 52-odd crores. The balance would be other income. Those include a lot of income, which are actually also related to the business. So, most of it is expected to continue. Yes. Vishal Mehta: Okay. And the other expenses in our P&L statement, which we gave in our presentation, the other expenses seem to have gone down quite a bit. So, any reason? So, from INR 72 crores to INR 51 crores this quarter? Murad Moledina: No. I really don't recollect, but I think in the last quarter, it could be the reason. I think the last year quarter, other expenses may not be that high. Vishal Mehta: Sorry, I did not get it. So, last year quarter was INR 72 crores. This year, it's INR 51 crores. Murad Moledina: Last quarter was June quarter, if you have it before you? Vishal Mehta: June quarter was again INR 75 crores. Murad Moledina: No, I don't think there is anything exceptional in this quarter, which has reduced. It might be some one-off might have happened, but no, there's nothing abnormal out there. Vishal Mehta: Okay. Okay. Because it's gone down from INR 70 crores level to INR 50-odd crores level. So, that is where I want...
No, nothing abnormal as such. Vishal Mehta: Sure. Thanks. Those were my questions. Moderator: The next question is from the line of Mr. Anil Sarin from K16 Advisors. Please go ahead. Anil Sarin: Good afternoon, gentlemen. Congratulations on the fantastic performance. I had a few questions. But before I ask the question, I just had a request. I have been tracking your company from calendar 2016 onwards. And always, there has been a challenge before the company, how do we explain the business? The format of the presentation has been changed in order to provide greater clarity and things have moved along quite a bit. There is much more understanding now. My request would be that when you give capacities and capacity increases, you give it port-wise or you give it location-wise. In addition to that, my request would be if you could give a consol, like total Liquid is so much, and this much has increased in this quarter or this much we plan to increase it over the next x, whatever time period. So, that is a one-shot understanding where people, without getting into Pipavav, Kandla, Haldia, Mangalore, et cetera. Just one shot, we can know, okay, Liquid is growing by this much percent and Gas is growing by that much percent. So, that would be a request you may consider. Murad Moledina: Noted. Anil Sarin: Great. Obviously, distribution has been a positive surprise, not only the quantum, but also the margin per tonne. If you could advise, this margin is sustainable, INR 4,000? Murad Moledina: I think if we keep on selling more, margins would be sustainable. So, we are very confident and bullish on distribution margins as well as volumes to continue. Raj Chandaria: I think, if I can just add one comment. In our last earnings call or even possibly the one, we had mentioned that the operationalization of both Mangalore LPG terminal and continuing capacity increases at Kandla and Pipavav LPG terminal will give a big boost to the distribution side, which actually has materialized in this quarter as we have really upped our game on the logistics efficiencies and so on, which has resulted both in increase in volume and in a, we think, a sustainable increase in the margin. So, it's really the addition of these 2 large cryogenic terminals along with the shipping efficiencies and so on that has resulted in this. Anil Sarin: Yes. Okay. Great. Thanks for that elaboration. I had a question relating to Mangalore itself, and so thanks for answering part of it already. The remaining part is that, look, the capacities in Mangalore are unlike any other port and very, very large capacities. So, considering the previous quarter was a rain-affected quarter, can we expect a very decent jump in distribution volumes ex Mangalore and thereby for the whole country to see a substantial increase in distribution in the coming quarters?
We really are working towards that. But again, I think what is also important for all of these LPG terminals, especially Pipavav, Kandla and Mangalore, there are 5 critical multimodal evacuation we are trying to hook into. One is KGPL in Kandla and Pipavav, JLPL in Kandla, then Mangalore, Hassan-Cherlapally Pipeline in Mangalore, rail gantry for LPG in Mangalore, as well as Kandla being enabled to berth very large gas carriers. So, these things are really going to shift the gear. And these are expected in very near term. So, I think that will also mean higher volumes and more business, of course, in throughput. But I think distribution also will benefit when these are in place, because the faster the product evacuates, the more space you get to do distribution business, it's very critical. And we expect all of these to come up in very near term. In addition, we are also getting an LPG bottling plant up and running in Mangalore. And don't forget JNPA, JNPA is also not far off. That would be an additional LPG terminal, additional bottling plant, additional hookup into pipeline, et cetera, et cetera. So, we are working very hard to become a very dominant and a very critical player as far as logistics of LPG is concerned. Raj Chandaria: I would just like to reemphasize one point, which Murad made that I think the addition of the rail gantry at Mangalore, which we mentioned, I hope people pay attention because the addition of the rail gantry at Pipavav had completely transformed the performance of that terminal. People may remember those who follow the company closely like you do, it really has transformed the LPG business at Pipavav. And we have recently started working on the rail gantry in Mangalore. And I suspect we are sitting here 12 months from now, we will be shouting from the rooftops about how wonderful the rail gantry at Mangalore is. Anil Sarin: Fantastic. Coupled with the fact that the capacity over there is really substantial and South is virgin territory for our company. Raj Chandaria: Correct. Anil Sarin: Also, just one last point, Hassan-Cherlapally, when do we get the connectivity? Murad Moledina: Well, everything takes time. This is infrastructure. But like I said, it's not very far. We are working towards it. And you can expect by next year-end for it to be operational. Anil Sarin: Next year end, as in fiscal '27? Murad Moledina: Yes. Anil Sarin: Great. Thank you very much, and all the best.
Thank you. Moderator: Thank you. The next question is from the line of Mr. Vinith Jain from Siddh Capital. Please go ahead, sir. Vinith Jain: Thank you very much. So, I have just a couple of questions. The first thing is, again, on the distribution, just as you had the last discussion. I want to understand the current jump in the volumes, still mostly from Gujarat and Morbi? And are we just getting started at other places or it's other way around? Murad Moledina: Morbi would not be more than 15%, 20% of this. It's all over the place now. Vinith Jain: Now it's all over the place. Sir, as you mentioned about the ammonia distribution, which might come maybe a couple of years down. So, is that going to be again part of the existing distribution business or... Murad Moledina: Yes, yes, very much part of Aegis Logistics distribution business. Vinith Jain: Okay. And sir, the second question is on the Vadhavan Port CAPEX, which you said, which is likely to be around INR 20,000 crores. This has already been included in the $5 billion CAPEX plan? Or is it apart from that? Murad Moledina: Part of it, yes. Vinith Jain: Okay. Fine sir. Thank you very much. Murad Moledina: Thank you. Moderator: The next question is from the line of Dr. Amit Vora from The Homeopathic Clinic. Please go ahead. Amit Vora: Good afternoon, everyone. Good afternoon, Murad sir. Good afternoon, Mr. Chandaria. My question is regarding the proceeds that we get from Aegis Vopak regarding the sale of Hindustan Aegis and the previous sales. So, how are we planning to use those proceeds in Aegis Logistics? Murad Moledina: So, we continue piling up cash in anticipation of the opportunities that we are seeing. So, as of now, I can't say that this is where we are going to use. But I can say for sure that there are a lot of opportunities which we are looking at. As and when they materialize, the cash will be very useful. You saw Vadhavan Port, INR 20,000 crores. There is another new port we are trying to get into. There is new energy called ammonia, we are expanding. There is already LPG expansion and liquid expansion that is going on. There are
Sir, one more question about the update of KGPL was already given, but are you sure that it can start by the last quarter of this financial year? Murad Moledina: If I would have been executing it, I would have said for sure. But yes, we are hopeful, and we see on ground enough progress for us to expect Q4 commissioning of KGPL. And we are very pleased to say that we have crossed the hurdle of PNGRB. We have got the approval of PNGRB for Kandla Port. Pipavav, we already had. Pipavav was not a problem. But Kandla, we got PNGRB approval to hook into KGPL also, which is just very short distance from where our hookup point is. So, yes, we are looking forward to start off in KGPL in Q4 this year. Amit Vora: Okay. Sir, in December '22, you had given a guidance of 25% annual growth CAGR, which has been maintained all the last 3 years. So, can we see this further in next 4 or 5 years also 24%, 25% CAGR? Or you expect even more than that? Murad Moledina: We have already said from 2022 to 2027. So, that's for sure. But I am now feeling fairly confident or we are feeling fairly confident that we should definitely more than do that. We would exceed the 25% CAGR, which way back we gave as a guidance to our investors from 2022 to 2027, I think we are working very hard to more than deliver this particular promise. Amit Vora: Thank you so much, sir. That was all from my end. Murad Moledina: Thank you. Moderator: Thank you. The next question is from the line of Neelotpal Sahu from JM Financial. Please go ahead. Neelotpal Sahu: Congratulations on a good set of numbers. And pardon if this is a repeat, since I got disconnected in between. Any outlook on distribution volumes, they have come pretty strong in this quarter. And if you could give us a sense of how is the price differential going on in this quarter? And how do you see the volume ramp up for this year and for next year, if possible?
Yes. Distribution volumes, we did 1.9 lakhs. I think we are on course to do good in this year as far as volumes and margins are concerned. The more the volumes, the better the margins it will always be on account of procurement efficiencies that we get. So, yes, I think next year also, I have said, I think, in the past that we work towards 30% CAGR growth as far as distribution volumes are concerned. I think this year, we would more than achieve that. And in ensuing years also, we expect to continue delivering at least a 30% growth. Neelotpal Sahu: So, the KGPL pipeline, have we like achieved connectivity? And is there any capacity constraint that we have? So, I understand the overall port has been allocated a 6.5 million tonne capacity. Is there a specified allocation that we have? And how do you see the volume ramp-up from the pipeline? Murad Moledina: So, 6.5 million, you are talking about Kandla? Neelotpal Sahu: Yes. Murad Moledina: No. So, Kandla, we have enough where we can do. As you know, we can achieve a turnaround and we can do 4 million from our site. And KGPL, IOC is also connected and also Adani Port is connected. So, we all 3 together have enough capacity to be able to deliver 6.5 million, which has been earmarked for Kandla Port. So, I don't think that there will be enough constraint. In fact, I personally feel that in a couple of years' time, we may, like you said, need to put up additional capacities in Kandla to do more of distribution in addition to KGPL and JLPL. So, probable, but not in short term, not in next 2 years at least, no capacity addition. After 2 years, yes, I think we would be in a position to do that. Neelotpal Sahu: Okay, sir. Understood. Thank you. Those were my questions. Murad Moledina: Thank you. Moderator: The next question is from the line of Mr. Romit Nagpal from Terrapolis International Private Limited. Please go ahead. Romit Nagpal: Good afternoon. Congratulations on a great set of numbers. Just a couple of questions regarding the capacity, the capital that you are going to spend, which is about $5 billion, most of it is probably going to be spent to build capacity for AVTL. So, how does this work practically? You spend the money and then do like a fixed cost plus margin and recover it from AVTL? Murad Moledina: Yes. So, this will be housed. This is all going to be housed in AVTL, of course, subject to all approvals. And we do the infrastructure development at arm's length basis. Generally, the margins are 25%. And in consolidation gets eliminated. But of course, being independent
The second question is regarding what you had mentioned earlier about the large amount of cash and you are looking at opportunities, which are plenty. So, as and when you are able to fix on such an opportunity, whatever you finally spend the money on, does that also eventually somehow result in it being housed in AVTL? Murad Moledina: It could, it may not. It depends, yes. But when we do for AVTL, what happens is the cash used comes back. So, it actually doesn't go out. Only when it remains in ALL, then the cash is, in effect, used. So, for AVTL, if we develop, then obviously, AVTL pays for the entire amount, including our margin. So, we recover back whatever we have spent and the margin remains in cash. So, that's how it is. If AVTL takes up, the cash doesn't go away. Romit Nagpal: No, no, that's fair. But as an Aegis Logistics holder, obviously, I am only concerned with Aegis Logistics for now. Thank you anyways. Murad Moledina: Whether it stays with us, of course, or it goes down. If it goes down, we earn upfront 25%. And then we are also a 44% shareholder of AVTL, so we earn out of the operations also. And if it remains with us, of course, it's a typical 20%, 25% EBITDA margin business. So, we earn likewise, even if it remains in ALL, depending on what kind of asset and what kind of infrastructure it is, will determine whether it is housed in AVTL. But if it is a terminal, yes, every chance that it will be housed in AVTL. Romit Nagpal: Okay. Thank you. That's it. Moderator: Thank you. The next question is from the line of Priyankar Biswas from JM Financial Limited. Please go ahead. Priyankar Biswas: Congratulations, gentlemen, first of all. And the quick question that I have for you is you were highlighting that with the connection of the Kandla-Gorakhpur pipeline, so there should be a ramp-up in volumes more in the second half. And what I assume is even Mangalore should be also ramping up as well. So, on that basis, can we get a broad idea like where we can end FY '26 around from an LPG volumes perspective? Murad Moledina: That's not what guidance we give. It all depends on lot of things, but surely, it is that Mangalore will keep increasing. Kandla also because we definitely are going to get hooked into Jamnagar-Loni in Q3. So, you will see the benefit of JLPL in Q4. KGPL, because it is getting hooked up in Q4, you may entirely not see the benefit, but it will be in the ensuing year that you will see the benefit.
Yes. So, essentially, the run rate that you are doing now, the quarterly run rate, so that should meaningfully increase at least in the 4th quarter, if not in the 3rd quarter. Would that be a right assessment? Murad Moledina: Yes. Right. Priyankar Biswas: And if I can squeeze one more in. Sir, you are also investing in ammonia terminals. So, what are the current status of the projects? I think you are doing 2 of them, right, Kandla and Pipavav? Murad Moledina: We have started development of infrastructure that is Pipavav ammonia cryogenic terminal that is underway. And that should finish in Q1 in the ensuing financial year. Kandla, we have not yet started because we still have to get into a binding agreement. We are just waiting for to see and get some commitments and then it will immediately start. So, not yet started, but planned, yes, it may be very soon that we may start. And that also may come up in the next year in the later half of next year, if we are able to start in a couple of months' time. Priyankar Biswas: Okay, sir. That's largely from my side. Murad Moledina: Thank you. Raj Chandaria: Thanks. Moderator: Thank you. The next question is from the line of Mr. Anil Sarin from K16 Advisors. Please go ahead, sir. Anil Sarin: Thank you. I just wanted to know about the JLPL. When does JLPL connectivity happen? Murad Moledina: Yes. So, we are trying to get that done in Q3. So, it should start from Q4. Anil Sarin: Okay. This is for Kandla or also for Pipavav? Murad Moledina: Only Kandla. Anil Sarin: Okay. Great. And also, you had given a disclosure a few days ago regarding the J2 project. What is the extent of this J2 project? All the numbers are given, but what is the CAPEX relating to the J2 project?
So, we are setting up 318,000-odd CBM of liquid storage terminal and 77,000-odd metric tons of cryogenic LPG terminal. In addition, 35,000 metric tons per annum capacity bottling plant. Construction is underway. We expect some of the capacities to come up in Q1 of next year as far as liquid is concerned. We expect all of that to finish by December '26. So, you will see some of the benefits of JNPA infrastructure development that is happening in the next financial year. Anil Sarin: Okay. That's helpful. But what is the CAPEX relating to this particular project? Murad Moledina: INR 1,675 crores. Anil Sarin: Okay. So, there's also a portion of the disclosure, which says that ALL, that is the parent company stands to receive INR 500 crores from this project. So, is it included in? Murad Moledina: No. So, we received 30% when we signed the framework agreement, which is essentially the order to develop the infrastructure. And then 70% is paid when the infrastructure is completed and operational. So, this INR 500 crores is 30% of INR 1,675 crore infrastructure cost that we are building in JNPA, which we call it as J2. So, INR 500 crores is in advance for this infrastructure development that ALL is doing from AVTL. Anil Sarin: Got it. So, once it is completed, then you hope to make a margin of roughly 20%, 25% on this INR 1,675 crores. Am I right in that? Murad Moledina: Yes. Yes, yes. Anil Sarin: Okay. Great. Thank you very much. Murad Moledina: Thank you. Moderator: Thank you. As there are no further questions, I now hand the conference over to the Management for closing comments. Raj Chandaria: Okay. Thank you very much. I think everybody has appreciated the excellent performance of ALL. And as mentioned, we hope to be able to sustain this level of performance over the next few quarters and next few years. And I think with that, I would like to conclude the conference call, and we look forward to speaking with all of you at the end of January. Thank you. Murad Moledina: Thank you. Moderator: Thank you, sir. On behalf of Aegis Logistics Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.