Aegis Logistics Limited (AEGISLOG) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 FY '21 Earnings Conference Call of Aegis Logistics Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anish Chandaria, Vice Chairman and MD for Aegis Logistics Limited. Thank you, and over to you, sir.

Thank you. I'll be presenting the quarter 4 FY '21 results as well as the full year results, the full year audited results for FY '21. I would say it was an okay set of results in Q4, and the full year results were slightly down versus the previous financial year FY '20. Not surprising in a year of COVID. But I think we were just slightly down in terms of the profits after tax. Let's start with total revenues. So total revenues for quarter 4 was INR 1,101 crores versus INR 3,843 crores a year earlier, primarily due to lower LPG prices. Obviously, since COVID happened, all commodity prices did fall a lot. Now they started rising, but at that time, quarter 4, so primarily due to that. The total EBITDA for quarter 4 was INR 145.4 crores versus INR 158.4 crores a year earlier, so a drop of 8% in the EBITDA year-on-year. Almost the same EBITDA as Q3, by the way, quarter 3 of FY '20. So we were -- in Q4, we were able to maintain the EBITDA at the Q3 levels. But year-on-year, it was a small drop of about 8%. The normalized profit before tax, excluding, as usual, the employee stock protection plan of INR 28.1 crores was the ESPP. But adding that back, normalized profit before tax for quarter 4 was INR 120.5 crores versus INR 128 crores a year earlier. That's a drop of 6% year-on-year in Q4. And the normalized profit after tax in Q4 was INR 98.1 crores versus INR 89.1 crores a year earlier. That's a rise of 10% and the key figure, the normalized profit after tax after minority interest for Q4. In other words, all earnings available to Aegis shareholders was INR 94.5 crores versus INR 75.9 crores a year earlier. So actually, a rise of 24%, primarily due to lower tax charges compared to a year earlier. And full year profit after tax after minority interest was INR 322.1 crores versus INR 338 crores a year earlier. As I said, a small drop of 4.7% year-on-year in the profit after tax figures. Mostly due to the first half performance in FY '20 being impacted by COVID, Q3 and Q4 saw recovery, as you know. But there was, obviously, Q1 and Q2, the first half performance, which is affected by the national lockdown in April, May, June and then July, August, September, to some extent. So that's a small drop in the full year profit after tax of 4.7%. Now let me go through the segment analysis for both divisions, starting with Liquid Terminals division. In quarter 4, the revenues were INR 65.7 crores, an excellent result again versus INR 53.3 crores a year earlier. So that's a 23% rise in revenues in Q4 year-on-year, excellent performance. And EBITDA was even stronger, INR 54.3 crores in Q4 versus INR 36.7 crores a year earlier. That's a rise of 48% year-on-year. These are really good figures and, I think, a testament to this division's outstanding performance this year, FY '21. During this COVID crisis, it has been actually a great performer. And I think it shows the resilience of this division when -- and the business model, which is primarily storage revenues for chemicals and petrochemicals and petroleum. Despite COVID, customers kept storage revenues up. And let me give you the full year figures for this division. Record revenues for the year as well, not only Q4 for FY '21, INR 234 crores versus INR 207 crores a year earlier. So that's a year-on-year rise of 17% in Liquid Terminal division revenues for the year. And also record EBITDA for this division for the year, INR 172.9 crores versus INR 140 crores a year earlier, a very good rise of 24% in EBITDA for the year for the division. And really driven by great performances in the Mumbai terminal, Kandla terminal, Haldia and Mangalore. These were all driving very good figures for the year as well as quarter 4. So very happy with the Liquid Terminal division performance. Now let's turn to the Gas Terminal division. The revenues for Q4 were INR 94 point -- sorry, INR 945 crores versus INR 1,188 crores a year earlier. The EBITDA for Q4 was INR 91.1 crores versus INR 121.6 crores. So that is a drop of 25% year-on-year in Q4. And I will just go through some weakness in the gas sales volumes in quarter 4, which I will now present. Starting with the LPG throughput volumes in our 3 terminals of Haldia, Mumbai and Pipa. The throughput volumes for Q4 was 714,899 metric tons versus 728,364 metric tons a year earlier. So a slight drop of 2% year-on-year in the quarter 4 throughput volumes. Industrial sales, of course, were more down. Quarter 4, 21,822 metric tons versus 31,195 metric tons. That's a drop year-on-year of 30%. Total gas was also down by 14% sales in Q4, 5,926 metric tons versus 6,866 a year earlier, a drop of 14% year-on-year. And the LPG Cylinders business, that is commercial and the domestic market segment, was also down by 15% year-on-year. Quarter 4 was 6,430 metric tons versus 7,580 metric tons a year earlier. And sourcing LPG volumes was also down. It was 194,593 metric tons versus 425,000 tons a year earlier. So the summary is almost every -- not almost. Every market segment that we have for LPG has continued to be affected by COVID in quarter 4. In other words, even quarter 4, January, February, March, before the latest surge in COVID has impacted sales volumes, they have not recovered to pre-COVID sales yet. Now we expect that to change, and I'll talk about that in the outlook shortly. But we still haven't recovered fully. So unlike the Liquid Terminals division, which has been extremely resilient in terms of the business model, LPG, particularly the retail volumes regarding Autogas and the commercial segments, et cetera, industrial sales, all of them have been particularly affected because of COVID. LPG throughput volumes slightly down 2%. But even there, do not forget that the public sector volumes are affected by their own retail divisions, that they're selling less volumes to the hotels and restaurants and all that because of COVID. So I would say this is really impacted to some extent. Now let's talk about the outlook for coming year, FY '22. We have actually very good expectations for the Liquid division, again, carrying on from the excellent performance from FY '21. And that's a result of more capacity increase. The Mangalore project, which is 50,000 kiloliters, will be commissioned in this quarter, that is Q1, April, May, June. And in fact, it's already presold, and we'll actually start generating revenues and profits in -- from Q1 of this financial year, FY '22. The Haldia project, which is also another 50,000-odd -- 50,500 kiloliters, also is going to be commissioned in this quarter, Q1, April, May, June, and that's also already booked up. So those 2 are going to be generating good revenues, and that's going to boost Liquid Terminal division revenues further in this financial year, beyond what we had in the previous financial year. Now for the LPG division, the Gas division. Despite the recent surge in COVID in this quarter, that means April, May, we actually expect a good boost to LPG sales volumes, throughput volumes, from -- throughout the year, FY '22, from the following factors. More rail movement in Pipa. Right now, we have been handling in the previous quarter, Q4, for IOC, but I'm pleased to inform you that we have just signed up with BPCL, the second customer in Pipa from -- probably from next month, from the month of June, for rail movements. So we'll have IOC as well as BPCL moving by rail. So that's going to boost throughput movements of LPG in Pipa. Secondly, we expect to continue good throughput in Mumbai through the Chakan pipeline, which is, since last December, has been operating at maximum levels. And we'll have the full year benefit of that in FY '22. We expect some bounce back in Haldia after the loss of the BPCL volumes because they obviously moved to their own terminal in December, which did impact Haldia volumes already in Q4. And it's going to take a few months for it to pick up again. But we have the forecast from HPCL, our customer in Haldia, that there will be an increased sales volumes in FY '22, which will not completely make up for the loss of BPCL, but at least 60% -- 60% to 65% of that will be made up by increased volumes from HPCL et cetera. And finally, the commissioning of the Kandla LPG project this year, the big project in FY '22, will -- these are all factors which will result in a boost to LPG throughput volumes not affected by COVID. They'll be -- these are not -- we do not expect any of these factors to be disturbed by COVID issues. However, the retail LPG segment will continue to be affected by the COVID wave. We don't know how long that will carry on. But I think it's natural to assume that there will continue to be some impact on the retail because people are not -- if they're all at home, they're not going to go to restaurants, they're not going to go to hotels, they're not going to be using taxis and auto-rickshaws as much. So obviously, these -- there will be some impact on that. But I think this will be outweighed in terms of the better volumes in the LPG throughput business, which I just mentioned, all the factors in Pipa, Mumbai, Haldia and Kandla. Longer term, of course, we have great growth prospects in our LPG business, which we have to look beyond COVID anyway. And we'll be updating investors soon on our growth plans for that as well. Now let me come to the project update. As I mentioned, the Mangalore liquid project, 50,000 kiloliters, that is being commissioned in this quarter, quarter 1 of FY '22, and all the tanks have sold out. The Haldia liquid project of 54,500 kiloliters will also get completed in this quarter, and we will commission it in this quarter of FY '22. And then obviously, we'll add to profits from then on. The Kochi 20,000 kiloliter project, the date of completion is expected in the second half of FY '22 in the current year. That means in -- between Q3 and Q4 of this financial year. And as I mentioned already, we have made further progress in the Pipa railway movements with having just concluded a deal with BPCL in addition to IOC 4 rail volumes. Obviously, there's 1 more customer left, HPCL, and we are now beginning discussions with them as far as rail movement in Pipa as well. But at least IOC, BPCL are now through. Now the Kandla, the main project, Kandla, the LPG project, I have to now report is delayed for the commissioning, probably to the end of Q2. We were expecting this to be commissioned in Q1. That is in the current quarter. But I have to now report that we expect this to be delayed for commissioning to the end of quarter 2 of this financial year and therefore, will not start generating those LPG throughput volume -- sales volumes until the second half of this financial year. So 1 quarter delay. It will not surprise you for the reasons. Unfortunately, the project workforce has gone down by half in this latest second wave of COVID in Kandla. We had in -- we had about 300 people, 300 to 350 people working on the site in March. That has declined by half because either they have got COVID or they have actually not reported to site. These are not our employees. These are subcontractors, the employees of the projects of contractors. But that's the fact. And that has obviously slowed down the work when only half the workforce is there. We saw that happen last year around April, and the same thing has happened. So it's unavoidable. It's very difficult to see, in terms of time frame, how we will build back that workforce so that we can complete the project. But at the moment, based on current weekly trends of people coming back to work, we expect this to have some impact in terms of the construction work. And also, no surprise, a lack of oxygen for construction work. That has also impacted. Everyone knows that -- and I think it's quite right that oxygen is being diverted to hospitals for people to really get essential supplies of oxygen for COVID patients. So that has affected our construction work as well. Again, I make no apologies for that. It's the priority of the country that we have to live with. All of which means that we expect a 1 quarter delay, as I said, for the commissioning of this project. Probably towards the end of quarter 2, we expect to commission, which means August, September time rather than in June -- May, June is what we were earlier expecting. If this changes, then obviously, we will update, but that's the current expectation. Of course, it's difficult to forecast what happens with COVID on that. But it's going to impact on the project commission. In fact, on procurement side, when we're procuring from America or elsewhere, that's all on track. So there was really no worries on that front, but it's these 2 factors, particularly. And that has slowed down the construction work, including one of the remaining things, which is finishing the pipeline work. And without finishing the pipelines, you can't obviously bring in the ship. So these are the kind of things that have delayed the commissioning. But we will -- we, at the moment, expectation is we will try to commission this with 1 quarter delay towards the end of quarter 2 instead of quarter 1. Now finally, I have indicated in the previous earnings call and other investor communications that the company will be coming forward with a major growth strategy update for the next 5 years, including our CapEx plans. And I can now confirm that this update will be -- we'll be making this update in June. And so it's obviously end of May now, 28 May. So -- but this will be one of the most significant announcements of our growth strategy for many years. And I would urge all of you who are interested in Aegis should attend it because it really will be a major growth strategy update, and we believe it will -- it will be really a transformational announcement from Aegis and accelerate Aegis into the big leagues as we'd like to do. So as I said, the exact date will be notified in June, but now I can confirm that we expect to come forward with a major announcement on growth in June. I -- earlier, I had indicated it might be in April or March or May. Things do take a little time to put together. But I think we are now ready, so I can confirm it will be June. And finally, I'd just like to say, we at Aegis are very much planning for the post-COVID recovery. And we can't just sit still while this crisis is going on. And everything we're doing now in terms of growth, not only finishing the commissioning of existing projects like the Kandla LPG project, but everything we're doing now is looking to post-COVID times and accelerating our growth plans, which is, I think, what we would need to do in Aegis to really start planning that. And that's the kind of announcements that we'll be making in June, as you'll see. Okay. That completes my summary of the results, and I can now take questions.

[Operator Instructions] The first question is from the line of Depesh from Equirus. Sorry the line of Mr. Depesh was disconnected. We'll move to the next question, which is from the line of Rajesh Kothari from AlfAccurate Advisors.

Sir, a few questions on my side. On this LPG volume front. If I take out the retail, excluding retail, our volumes are less than even the third quarter volumes. Now what was given to understand during the last conference call is that Pipavav was impacted till the time the project was not on, but then the project was started. So we are expecting recovery in Pipavav in fourth quarter itself. And number two, even Mumbai was expected to ramp up significantly. In fact, it was indicated that from January itself, the ramp-up has been very significant. So what are we missing?

Yes. Good question. And basically, as far as Pipa was concerned, although we did commission the railway gantry in January with IOC, it has taken some time to get the next customer, which is BPCL. I have nothing positive to say in that. Every single week, I've been in touch with our marketing people, when are you concluding the next movement over there. So we expected that to happen in quarter 4. It did not happen. In fact, it has just been concluded literally last week, and they'll start in June. So a delay in that. And they -- it's significant volumes from BPCL. So that did not happen in quarter 4, as per our expectation. Main reason, and I'm sorry to say this, is that during these times, every single decision of some of these companies has slowed down because of people are not in the office and all those things. So anyway, it was a significant delay that it is now actually into June. But now this will happen. I thought it would because once IOC start in January, we did expect that there would be some volumes but got delayed by some time. So that did impact on Pipa volumes. Haldia, actually, the loss of BPCL throughput because they commissioned their terminal in December, that did actually take away a significant amount of throughput from the Haldia terminal in quarter 4. And that will continue to some extent, even in quarter 1 of this year. But as I said, the latest forecast that our people have put together based on HPCL volumes is that this will bounce back in the coming months. So we do expect to -- there was going to be some impact of lower throughput volumes in Haldia. But that will be 50%, 60%, 65%, something of that range will bounce back in the coming. We've already started seeing rising throughput volumes already, for example, in May. So that is it. Mumbai was okay. That has continued to operate at good levels. So anyway, the answer to the question is weakness in LPG throughput volumes in the -- in quarter 4, relative weakness even compared to Q3 was less volumes in Haldia because BPCL went out compared to Q3 and Pipa, we didn't add as much volumes as we thought we were because BPCL rail movement was delayed until now in June. But this is temporary, and we expect -- and Mumbai has continued to operate well. So we expect this to recover in both Pipa for the reasons I gave and in Haldia. But it will -- that recovery will go into this year, FY '22. It did not happen in Q4.

Sure. No issues. That's absolutely fine. And just a little bit, trying to understand a little bit more detail into that. Is it Mumbai, if I'm not wrong, it adds about 120,000 additional per quarter, am I right? [ About 120,000, right ]?

I don't give the exact breakup of every terminal. But essentially, if I can talk in an annual basis, we've talked now, with the Chakan pipeline and all that, that Mumbai can operate roughly around somewhere between 1.2 to 1.4 million tons per year. So if you take 1.2 million, that means around 100,000 tons a month, and 1.4 million is around 110,000. So that's the kind of rate that we can sustain. We could -- that could increase a little bit more, in fact. Possibly as much as 1.5 million tons annualized in Mumbai, depending on demand. So there's a little room to grow even in FY '22.

And for Haldia, the loss of BPCL would be about 15,000, 20,000 on a quarter basis, am I right?

Probably a bit more. Probably a bit more.

Probably a bit more.

Yes, yes.

Okay. And the Pipavav, we know, the BPCL, basically, you are saying even in 1Q, is they are coming by June. So even the first quarter is kind of almost like gone, maybe only 15, 20 days might be there. So probably from second quarter, should we assume the 200,000 to come back in Pipavav?

I don't want to give an exact figure, but yes, there will be a good recovery in -- from quarter 2 in Pipa because now IOC as well as BPCL. The reason I don't want to give an exact figure is we are still negotiating with BPCL as to how many rigs the railway wagons are going to do. So what they've said is that, look, we will start off in June. And then we will add to it as the teething issues and all that. So it will take some time. But we can't just expect that everything will happen even in quarter 2. But I'm just saying that now that we have cracked BPCL, we expect -- we know which bottling plants, et cetera. They are quite good volume. So we expect IOC and BPCL to grow. And as I said, we still are working on HPCL. If that happens, then it will be even better. But remember one thing which I did say in previous earnings calls. The one thing which would -- could boost Pipa even further is if we could actually bring VLGCs into Pipa, which requires some jetty modifications by the port. And of course, they've just had a cyclone there last week, et cetera. So that work is -- it's still not finished and delayed. So at the moment, Pipa, because they can only bring midsized gas carriers, and there are only so many midsized gas carriers in the market, that does give some restriction. Once that jetty work is completed, which I was hoping would be completed by the monsoon, I've not got the latest update from the port, that's not -- I think that will be delayed because of various things. When I say delay, it could be as much as 2, 3 months, that kind of thing. Any case, once that is possible, we will get a further boost because the sheer availability of VLGCs, very large gas carriers, will allow more ships to come and that will give a further boost. So it's going to be a step-by-step process in Pipa to build up the throughput volumes. First thing is, yes, let's now get BPCL to start working in June and then growing those volumes. Let's get HPCL. And then the next phase is get this jetty work over, which is being done by the port and which will allow more ships to come in, which will therefore boost volumes. So I think throughout -- the answer is throughout FY '22, quarter by quarter, month by month, we expect to grow Pipa, but it will not be just a quick jump. It will be a step-by-step process. But we -- the benefit of this railway gantry is going to be -- it's strategic and long term. It will not just be 1 or 2 months. But now that will really improve. And that's going to be part of the growth story in terms of earnings growth for Aegis in FY '22 and beyond, this Pipa story in the way that I described.

And for Haldia, the BPCL customer, we launched for 1 month basically or from January itself, we stopped them?

Actually from January itself because the completion is...

So I see. So it is a full quarter impact, okay.

Yes, full quarter impact. And that obviously will continue, as I said, even in quarter 1 now in January, February, March -- sorry, April, May. But what I did say, and we had our Board meeting, in fact, yesterday as far as we reviewed this whole thing through the program for the year, the outlook for the year, so I won't go into the specific numbers. But what I did say is that possibly 60% to 65% of the BPCL volumes will be recovered because of increased HPCL. So it won't be fully recovered this year, FY '22. But -- so there will be a bounce back in FY '22. It's already started. You can see that in the May figures. But it was never going to happen in 3 months. So I think that's positive for the future. And HPCL has pretty aggressive plans of building out. I'll just mention this, again, just so that people understand, this was discussed in the Board meeting as well. Some of you may remember, I've gone on about the Panagarh bottling plant, which consumes 0.5 million tons. HPCL bottling plant is the largest bottling plant in Asia, in the whole of Asia. So it is still operating at around 50% capacity utilization. In other words, only -- they're only taking about 250,000 tons a year. And that's part of the process this year, why more LPG will flow into Panagarh to raise their capacity utilization. And that's the reason why we think that there would be a bounce back in HPCL throughput volumes, which will recover part of the lost BPCL volumes. And that will, of course, carry on in future years, but we'll see some of the benefit of that in FY '22.

The next question is from the line of Depesh from Equirus.

Sir, hopefully you can hear me now.

Yes, I can hear you. Go ahead.

Yes. Sir, the Liquid segment has had an all-time high margin of 82% versus the normalized 65%, 70% margin that we used to see. So if you can please explain what led to that and if you can highlight any price hikes you have taken across any [ ports ].

Yes. As I said, we are very proud, and I really made that clear, of the performance of the Liquid division throughout the year, not just Q4. Q4 was a record, but Q1, Q2, Q3. And some of it was because of the change in product mix, particularly in Mumbai and Kandla terminals, et cetera, that we were handling higher-margin products. So that obviously further boost EBITDA and revenues. But generally, the main message to take from the performance of the division for the year as a whole, not only Q4, is that, as I said, it's been extremely resilient. The customers have continued to hire the tank storage tanks because they knew, whatever happened with COVID, that they needed those to store their goods. And so we've had really excellent occupancy levels at all terminals with the exception of Pipa, which remains at 20%, 25%, but all the other terminals, including Kochi and all that. And which is why we are expanding in Mangalore, we're expanding in Haldia. And when I come forward with these growth announcements in June, part of that you will see, and I'm not going to reveal it right now, but part of that is going to be another major push by us in the Liquids business because we have great prospects on that. I think people will be quite pleasantly, I hope, pleasantly surprised by the scale of what we have got in mind. But anyway, it's been a good performance in Q4, changes in product mix. But as I said, capacity utilization has been extremely high, particularly in Kandla, Mumbai, Haldia, Mangalore, and we've really generated good revenues and good profits in that division throughout the year.

Understood. And whenever the capacity of liquid terminals increased, historically, we have seen some pressure on the margins as you generally start with the low-value liquids, right? So when you say Mangalore and Haldia presold the coming capacities, how do we see the margins going ahead for these 2 terminals?

Yes, that's a really good question. And I had actually the same question for our marketing people in the Liquid division. And you're right. But normally, that's always what I say, "Okay, we start with lower value products." Now the good news is, and I can really say this, is the new capacity which is coming on stream in this quarter, in Mangalore, 50,000, as well as Haldia, actually is higher value already. So we are not going to -- we're actually going to see because those have already been presold. So we're actually going to see right from day 1 pretty much good margins and good revenues from that new capacity, unlike the normal bank. So that's a good sign. And as I said, it kind of -- it informs our growth plans in this division even for the next 5 years, which you'll hear about in June. So it's a good pattern for that. But that -- they are going to start generating revenues from quarter 1 in that -- in Mangalore as well as Haldia, which will add to the good performance we've already seen in the other terminals.

Understood. And lastly, sir, if you can just -- I know you don't share the port-wise throughput volumes. But if you can just give us capacity utilization levels of the Haldia terminal FY '21. And what was the contribution of BPCL in that? That will be really helpful.

You mean the LPG terminal?

Yes, sir. Yes.

Yes. I mean I think the capacity -- the total throughput capacity that we have in Haldia is, as per our investor presentation, is 2.5 million. So we would have probably ended somewhere around 50% of that in FY '21. And BPCL, I think, is probably -- was around, I would say, probably around 30% to 35% of that, which we have to replace. So that's where we are. But I can mention to you that based on the plans that we have with HPCL, I'm not going to go through all of that now because I'm going to say more about it in this growth update, in fact, as far as Haldia is concerned. But based on that, we are really confident about hitting that 2.5 million tons, 100% capacity utilization figure in Haldia in the coming years, not really -- will not happen in 1 quarter based on that. But I have more to say about it in the June update. But anyway, right now, that's where we are. And the first job is to replace the BPCL volumes with more HPCL, particularly the Panagarh plant. And then we've got additional plans which will enable the road to the 2.5 million tons, 100% capacity utilization. But as I said, I'll say more about it in the June update.

The next question is from the line of Jiten Doshi from ENAM Asset Management.

So Anish, first of all, I must say that whenever we speak to you, we always get a little booster dose like the vaccine because you're always very optimistic. So I just need to see that converting to the results in the future. That's one. Two, basically, I'm a little confused because we are building up our LPG capacity from 9.6 to even further with 1 more terminal in the south, right? Is that correct?

Yes.

Now we are at 3 million today. But I mean, what are you seeing that we are all missing? Because at 3 million, if you're able to produce this sort of an EBITDA, when do you think you'll utilize and go to 12 million?

Yes. So we've talked about this before. And I'm going to be able to give a much more detailed answer when we do this growth update because that is for the next 5 years of when we're going to be able to take up the sales volumes. By the way, the figure for FY '21 was 2.91 million. That is the throughput versus 3 million in the previous year. So a long way to go, given that we've built all this capacity, as you rightly say, and we're going to add capacity. So I'll say more about it in the June update, and I think you'll see some very specific answers. But the long and short of it is that the result of some of the projects that we have done, which includes the Pipa railway gantry, the commissioning of the Kandla LPG project, some further moves that I will be talking about in Haldia, et cetera, will be able to show you how we intend to take up the sales volumes in the coming years towards that -- those kind of capacities. And that's absolutely key to the profit growth, earnings growth of Aegis over the next 5 years. So you'll get more detail in June, which is just a few days away now. And -- but that's really the answer, that it's nothing really to do with COVID, which we will all be relieved to hear. This road map of how we add volumes in Pipa, we add volumes in Haldia, we add volumes in Kandla, obviously, we'll add volumes in -- when we commission the future projects, for example, in the south, et cetera, how that will build up towards those capacity. We'll be able to give a little bit more detail on that.

So actually, frankly speaking, I would be shocked if you tell me that in the next 5 years, you can't make INR 2,000 crores of EBITDA because you're building up the whole company. What is even great is your Liquid division has now reached a run rate of INR 200 crores EBITDA every year. And I think with all your expansions, you will go to north of INR 300 crores, INR 350 crores. But I'm just saying that when will you think you'll hit a quarterly EBITDA run rate of about INR 150 crores in your Gas division because that's like long overdue. We can't believe these numbers actually.

Yes, it is overdue and unfortunately, life is never perfect. We would have expected to be better than where we ended up. Some of it is due to COVID, as I said. Some of it is due to delays in things which are unfortunate. But as I said, I think we're on the right road, and I think we will be able to explain in quite a lot of detail in June, exactly when we'll be able to reach those kind of numbers. So please attend that thing and...

No, of course, I would love to. And I think there's no other company as beautifully positioned to actually capitalize on the opportunities than Aegis. It's just that we are a little -- we are quite flabbergasted to see all the last 1 or 2 years' results, we believe which should have already happened. And of course, you're killing us with your suspense over the next 1 month. But my question is that the businesses that we love are the Autogas, the commercial LPG, the domestic LPG, Chhota CIKANDER. There, we are not seeing you talk of large numbers. The growth plans that you've given in your presentation are only 200 gas stations. So you should be at 500 because that's the business if it's getting you the margin, and that's the vision we are seeing. I think those numbers we find are very conservative in your presentation.

Unfortunately, you call it conservative, I call it realistic because I have long experience on the ground, and it's actually very difficult to achieve more than that. And because the realities are, it takes sometimes 3 years to build 1 gas station because of permissions, things like that. So there are the realities of how to build out. But you're right that. that, look, we want to put more efforts into this retail division, not only Autogas stations, but also on building out the dealers and the bottling plants and all that. At the moment, I would stick to what we said. Even if we can implement that, it's still what we said. I think it will be a major driver of growth for Aegis for the years ahead. But it is hard work on the ground to build out this distribution network with all the constraints that we have in India. So yes, it's conservative or realistic, whichever phrase you want to do. But there's a lot of scope for...

No. Absolutely, we believe in it, and that's why we invested. But I think somewhere, we are not seeing the numbers. It's been quite 24 months. My question to you is that when do you think on a quarterly basis, we'll hit that 1.5 million, which is actually what you can do and you will do?

Yes. So I said at end June, the growth update, and you'll get much more sense of that.

Okay. So you're holding an analyst meet probably in June, which can give us the road map for all of that?

We will give you a road map, and I think there's a lot of stuff in that. I have the presentation in front of me right now, to be honest, but I'm not yet ready to finish it.

You want to kill us in suspense and all. So anyway, we'll go through it but...

I'm not playing games here. Obviously, we only release that update when it's ready. I did say it once, this might be ready in March, [ April ]. It's exciting. It's exciting and it's global, and it will be worth watching. But it's a lot more than what we have talked in the past about -- so it will be quite a lot of new information. And...

No, actually, we really do believe that your Liquid business, in 5 years, can be at least INR 500 crores of EBITDA. Your Gas business, I will be shocked if it's less than INR 1,500 crores, INR 2,000 crores because that's the way of building your capacities. And the only thing is last 1 or 2 years, we have not seen that. And I think your -- what I just want to know from you is the conviction with which you are still putting capacity because we are still at 3 million and you're still putting another 3 million. So how is it that -- I mean what is it that we are missing? So you really do believe that these volumes that we are seeing subdued right now is only a temporary phase, and you will see a huge pickup in the years ahead?

Yes. Yes. Absolutely. I have full conviction on that. And as I said, we will paint the picture properly, we've been working very hard on that, which will explain a lot more. And you can -- you're perfectly entitled to ask me more questions in a few weeks' time.

No, I mean, you all have done very good execution. You're beautifully positioned. But I'm just -- we just -- I mean we just want to know what's the road map ahead. Anyway, so we will talk to you in June. But anyway, congratulations that you all have actually gone and built capacities in the worst period, that you all have actually sort of tried to battle it out in COVID. So anyway, all the very best and really look forward to the June update.

Thank you. And we will -- I assure everyone we will be accelerating our plans. That's really the purpose of the June update. Okay.

The next question is from the line of Kashyap Jhaveri from Emkay Investment Managers.

Yes. I have just 1 question and 3 clarifications. One, on the clarification side. If I look at your balance sheet at the end of March '21, our working capital components have dramatically declined, though overall working capital hasn't changed. So we have just about INR 95 crores of payables and about INR 75 crores of -- sorry, INR 94 crores of receivables and INR 75 crores of payable. How does one read this absolute number? So as a number of days, working capital has only improved. But these numbers have gone down dramatically. Are these only quarter end numbers? And the actual numbers, I mean, on average, would be in line with what we have been reporting in the past?

I'll comment on that and Murad can -- he's on the line, our CFO, he can also comment after I finish. By -- I think some of it is just the fact that the international LPG prices have dramatically fallen so much because of COVID and all that. So obviously, all absolute figures would be less purely because prices are much less. You all remember when crude oil fell, LPG prices also fell a lot. So that's probably the answer. Murad, do you have any further clarification on that working capital figures, payables and...

Yes. If I can add to that is that the sourcing volumes have come down. So this would have otherwise been if you look at last year's quarter sourcing volume and this year. So there has been a drop because of this. This has got a direct effect on.

Okay. Okay. Got this. Got this. Okay. Second clarification I wanted is that on the liquid side, to one of the earlier questions, you highlighted that there has been some product mix change also, which has helped you report this kind of margins. However, it looks like on the cost side also, there has been a dramatic drop in this particular quarter. So I'm just reducing the normalized EBITDA that we report in the quarterly presentation, which has moved from about INR 39 crores to INR 54 crores Q-on-Q. Whereas if I look at our revenues have moved up just from about INR 57 crores to about INR 66-odd crores. So there seems to be, I think, about almost about INR 6 crores, INR 7 crores cost drop also in this particular quarter. If you could help me understand that.

Murad, do you want to comment on that one?

Yes. Can you please tell me -- I mean, where did you get that revenue?

Okay. I'll repeat the numbers. So our quarterly revenue in the Liquids segment has moved up from INR 57 crores to about INR 65.7 crores.

Yes.

That's about INR 8.5 crores increase quarter-on-quarter versus December quarter, I'm highlighting.

Yes.

Okay. And if I look at our normalized EBITDA, which we report in the quarterly presentation, which was about INR 39 crores in quarter 3, December '20 quarter has moved up about to INR 54 crores. That's a growth of about INR 15-odd crores. So I'm saying there is a delta of INR 15 crores in normalized EBITDA versus December quarter, whereas the revenue have changed only by about INR 8 crores or so -- INR 8 crores or INR 9 crores or so.

Around INR 10 crore revenue and INR 14 crore, if you look at EBIT.

Yes, about. Yes. Yes. Yes.

So it's a difference of INR 4 crores, which is around INR 1.2 crores per quarter. Yes. So because of COVID also, there has been a lot of reduction in expenses also. Obviously, people not coming to offices and operating from home, et cetera. So all of that. But what is more important is the increase in revenue has flowed, everything of that has flowed into the EBITDA because of the margins or high-value items that we have sold. So yes, the expenses are not very significant of around INR 1.3 crore a month. But that is also...

But ideally, that should have reflected in the previous quarters, right? Because fourth quarter, most of the work force would have reported for work, barring probably in the last month, probably last 15 days when Maharashtra probably -- or maybe some of the other states went into...

We have operated from home throughout the lockdown, so that has always been there. Yes.

Okay. And just third clarification over here, again, on the balance sheet side. Our employee loans and advances have gone up by about INR 100 crores in this particular year. Has any repayment plan also been worked out, how employees would pay back this money? We would have given them this INR 100 crores for what, the employee stock options? To exercise them? Or can we legally do that?

Yes, if I may say so, it is towards the tax of ESPP and the repayments would start from the next year.

The tax of is -- I mean the TDS that you've got to [indiscernible]

Yes. Yes. Yes.

And how do they pay -- so will this be deducted from the salary? Or how does it happen? Over what period would this be paid back?

These are complicated because these are all in relation to lock-ins also because there are lock-ins on the shares. So once the lock-in expires, then you start.

So on -- this will fructify only if they sort of exercise the options? Or is this a certified liability towards taxation?

No, no. These are taxes, like I said, which otherwise, if we were not to get ESPP deduction, the company would have had to pay on its own account. Now this is recoverable once the lock-in gets over, over a period of time. The period of time is 5 years. So it would take the next 5 years.

So just to clarify from my side. The -- those loans will be repaid. Obviously, now after the lock-in period, these employee stock options, they can be sold, and then they can obviously pay back those loans to the company. But -- and obviously, the higher the share price goes, the less shares they have to sell. But right now -- so we -- that program will now begin since the lock-in periods are according to the schedule.

Sure. And just 1 question from my side. In Haldia, BPCL has got 3 million ton LPG plant, right? I mean the filling plant. As of now, you said, they are working at about 1/3. But in terms of throughput, do they have the full 3 million ton capacity or incrementally as they increase the volumes, a fair part of that volume will come forth as a throughput?

Yes, I think you need a terminal...

The bottling plant is for 3 million tons, right?

No, no. You're talking about bottling plant or the terminal? It can't be 3 million. 3 million is...

Or maybe I'm confused. If you could help me understand both, the bottling capacity as well as...

I think you mean the BPCL LPG terminal, which probably could do a throughput potentially of 2 million to 3 million tons, the kind of bottling plant. So that -- what we said is they commissioned that in December. And -- but their volumes were not that much when they were throughputting LPG from us. They would have been far less than 2 million tons. So they have -- they will take years to build that up while they build up their distribution network, in the same way that HPCL is building up the distribution network. So they will -- of course, you have to ask them, but they will probably take a few years to reach those kind of throughput levels. But they were not operating in that kind of level, even when they were throughputting through our terminal. I mentioned the kind of 25% to 30% of our throughput volumes were with BPCL. So that gives you some indication. It's far lower than [ 2 million tons ]. That will take some time for them to build that up.

So from BPCL, there would not be any incremental volume which could flow to us in Haldia, right, because they have their own spare capacity?

Never say never, but we don't expect that right now. For us, it will primarily be HPCL. There are some ideas and some discussions we have, I don't want to go through that right now. But yes, it will primarily be HPCL who will be -- incremental throughput will come from HPCL for us.

The next question is from the line of Himanshu Yadav from Edelweiss Wealth Research.

Quickly on the liquid side. I mean, as you were saying, that despite COVID, the customers were happy to know higher the capacity and then we were operating at utilization. So do you think this is something sustainable? Or there could be some rollback once things normalize? I mean is this high margin and super results due to COVID? Or is it something which we should probably...

No, we don't think it's due to COVID. We think it's sustainable. In other words, it's nothing to do with COVID. The whole point of the Liquid division is that it's been less affected by COVID than anything else. So it's nothing really to do with COVID. We think it's sustainable in that these are the products that they want to store. In fact, we've got some -- I don't want to go into it right now but -- in detail, but we've got some work going on in Kochi, for example, which I've not really mentioned. That if that works out, they will be further boost over there. So we think -- and again, I mentioned about June update. We are really quite bullish on this Liquid division. So hence, we think this is sustainable. And it's a result of India's -- nothing to do with COVID. It's a result of India's requirements in terms of chemicals, petrochemicals and petroleum requirements over many years to come. That is what is driving the growth in this. So we think it's sustainable. We are building more capacity as we discussed commissioning of Mangalore and Haldia and all that but -- and still, we're working on the Kochi project. But as you'll hear in June, we've got many more plans in this Liquids business going forward. So therefore, we -- by definition, that means we think it's sustainable, and we really expect this to be a significant driver of growth for Aegis in coming forward in the future.

Sure. And a second question is on the LPG. I mean you're saying that the 4Q was weaker because the PSU guys weren't able to sell as much LPG as they could have -- I mean because maybe restaurants were shut down. But I mean, it seems counterintuitive because during the, I mean, Jan to March period, I mean, things were like opening up really well, and there were a lot more vehicles on the road. And people were moving out. So actually the lockdown and everything started from April. So what explains the slightly weaker performance in 4Q?

Yes. So I kind of explained it, but let me repeat one more time. So let's first talk about the throughput volumes. They were -- as far as the throughput volumes, in the terms are concerned, not really affected by COVID particularly. So I'm not saying it has to do with COVID.. There were specific factors in Pipa that, oh, we were delayed in getting the second customer for further rail movement than we expected, which only now is going to happen in June. It took time, the decision-making, et cetera. So that was our expectations. It did not happen in Q4. It will happen even now later in June. So there are specific factors related to less volumes in Pipa than we had expected. As far as Haldia was concerned, I mentioned that, of course, once BPCL went out, there was going to be the loss of those volumes in quarter 4, which happened January, February, March, pretty much as predicted. We will take some time to build those back in the way that I described. So it was not really to do with COVID. These are specific factors related to Pipa and Haldia, Mumbai continue to operate well, which means that the sales volumes were lower than we expected, in fact, in quarter 4. But we expect that to change in the coming months for the reasons I gave. So nothing to do COVID really. Yes, on the retail side, meaning, the Autogas sales and industrial sales as well as the commercial sales, cylinder sales. Yes. Look, it's still -- despite there were lower level of cases, et cetera, things have still not recovered, even in January, February, March. And it got worse now because of COVID, but they still not recovered to pre-COVID sales. In other words, people were still not going out to hotels and restaurants as much as before COVID. People were still not moving about as much. So that's the reality on the ground that things were not back to completely -- no. And now it's got even worse in April and May, as you all know. So it's going to take more time. I can't forecast when things will go back to pre-COVID levels. But even in January, February, March, the reality on the ground was that things were still not back to pre-COVID sales regarding taxis and auto-rickshaws and hotels and restaurants, et cetera. I think you all know that. But sooner or later, it'll happen. When it will happen, I don't know. But probably it will still take some more time. Point is that we can't -- we have to keep building out our network. For example, I was very happy, and I had mentioned this in the Board meeting, Aegis Board meeting yesterday, that I think we added more stations last year, FY '20, Autogas stations than in any of the previous 15 years. So I think we have something like 9 or 10 stations we added. So we have told our people that, look, while sales are affected right now, keep building the network, keep building the distribution dealer network, et cetera. And we continue to do that. So that when COVID is finally over, then the sales will bounce back to that extent because we have the gas stations in place. So we have the dealers in place. So that's -- it's going to happen, but it -- clearly, we have not -- the reality on the ground is that we have not gone back to -- in that particular division or segment, we have not gone back to pre-COVID sales. It's probably a matter of some time, still more months to go until the second wave is over in, yes, your guess is as good as mine. But we'll be standing in good -- we'll have good foundations for when that happens; that, that business will really bounce back because we will have expanded the dealer network and the distribution network. So that's actually what happened.

Right, right, right. And just clarifying on the liquid side. Mangalore and -- I mean, the current volumes, which are plugged in 4Q is excluding the newer capacity, right? And there will be an addition to that?

Yes, this will be in addition because they're being commissioned right now in this quarter. That's in Q4.

The next question is from the line of [ Sriram Rajaram ] from [indiscernible] Capital .

Sir, [ effectively ], imports -- LPG imports for the month of April have gone down by 20-odd percent. Even sequentially, they are down by 28%. So can you throw some light on this?

Yes. There's always a seasonal thing that you'll see and probably when we come to quarter 1. April, May, June is a kind of a slower season for LPG demand and LPG imports. And then it starts picking up. We see this every year. Some of it is because it's holiday period, May and all that also. So I think that's not really surprise. That's been the pattern for some time. So not to get overexcited, if I can say, just because of 2, 3 months. That's a normal seasonal pattern. But then LPG demand does pick up in future months. So I think that's really the reason. Again, I don't think it's COVID related particularly. It's just a seasonal thing that there's lower demand in these months, April, May, June.

The next question is from the line of Nimish Desai from Kitara Capital.

Anish, this is [ Riya ]. Just needed a small clarification on the current LPG capacity at the end of March '21. So I'm referring to Slide 12 of your presentation. As I understand, you had a throughput capacity growth of about 5 million tons at the end of March '20. Is that correct?

Yes, I'm looking at Slide 12. So sorry, say that again. The...

So I'm looking at the chart on Slide 12. So at the time, we had a capacity of about 5 million metric tons at the end of March '20. And now that Kandla, and Pipa, which were to add about 4.2 million, will now come through in FY '22. So at the end of March '21, our capacity was still at 5 million metric tons. Is that a correct understanding?

Yes. That is -- actually, I think we do have to modify that slide because Kandla is -- would not have been commissioned by -- so that 9.6 million by March '21 is not correct. I think -- sorry, my apologies. We'll have to correct that. I didn't catch that. That will come into FY '22. It's a little delayed because -- but probably, we would have potentially a higher capacity than 5 million in -- by March '21 because of the Pipa railway gantry. But anyway, not 9.6 million. That actually should be FY '22 because Kandla will only be commissioned now. So yes, you're right to catch that. I will tell our people to correct that slide.

All right. And from Kandla and Pipa, we were expecting about 4.2 million and -- which would have come to about 9.2 million total. And since the slide mentions 9.6 million, I'm just trying to bridge the difference. Is it fair to assume that, that 0.4 differential is from that railway gantry at Pipa?

Yes, potentially. We might revise that figure down. But yes, potentially, that was the reason for 9.6 million, Pipa plus Kandla. You can see Pipa, we put 1.6 million and then Kandla, 4 million. So yes, that's how it comes to 9.6 million. We might marginally adjust that figure. But yes, that was -- it was because of that Pipa railway gantry. Plus the -- we are adding 2 spheres in Pipa as part of the project, which is still not completed. But it will probably be, as I said, FY '22. We'll probably change that chart, that 9.6 million or it might be 9.4 million, somewhere around there, in FY '22 rather than as it's incorrectly represented, FY '21. That should be corrected.

Ladies and gentlemen, due to time constraints, that was the last question for today. I would now like to hand the conference over to Mr. Anish Chandaria for closing comments.

Thank you very much for all the extensive questions. Yes, I think a broad summary is that we are now looking to the future. Q4 is over, and FY '21 is over. A tough year for India. And -- but I think Aegis has come through it okay in terms of a slight drop in profits, but we've been able to maintain uninterrupted sales as much as possible. But we are now looking to the future of Aegis. As I've kept on repeating throughout this earnings call, we are very much looking forward to the future, actually explaining to investors and brokers and analysts what's next for Aegis. That's a common question which many people have been putting to us. I think we have got actual answers for that, which we will be detailing in our extensive growth update in the month of June. We've got really good answers, I think, in some detail on that. And we will be really presenting that road map over the next 5 years. Quite frankly, not only the next 5 years, but the longer-term future of Aegis. So that should answer a lot of questions. And feel free, whoever is attending those calls at that time, to ask more questions once you see. But there's a lot of announcements that will be all put together in that one, I think. And we have to -- as I've emphasized today, we really have -- like many companies, we have to look past COVID now and not keep talking about COVID. It's -- whatever we're now going to talk is irrespective of COVID. Whenever that happens, we will be looking forward to that. And as I said, it's the next stage of growth of Aegis to take us into the next league that we'll be detailing. So look forward to presenting that in June. And however many of you can attend that. Thank you very much.

Thank you. On behalf of Aegis Logistics Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.