Aegis Logistics Limited (AEGISLOG) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 FY '22 Earnings Conference Call of Aegis Logistics Limited. Today on this call, we have Mr. Raj Chandaria, Chairman and Managing Director of Aegis Logistics Limited, along with the senior management team. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. Actual results may differ materially. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Raj Chandaria, CMD of Aegis Logistics Limited. Thank you, and over to you, sir.

Thank you very much. Good afternoon, everybody. I'm joined by our Chief Financial Officer, Mr. Murad Moledina, and we will be presenting the Q3 results for the financial year '21, '22. Also, the outlook for the balance of the year as well as an update on the Vopak joint venture. Now you will recall that we had a weaker start to the year in Q1, which was period of the Delta wave hit in India from April, March -- April, May, June, followed by a recovery in Q2, July to September. And I'm pleased to say that Q3 October to December, reinforces the recovery trend and puts us firmly on the track for a good overall performance for the whole of FY '22. Revenues increased to INR 1,214 crores versus INR 635 crores in the previous quarter, primarily as a result of higher sourcing volumes. EBITDA for the group rose to INR 159.5 crores versus INR 147.6 crores in the previous quarter and INR 147 crores a year earlier, which is actually a lifetime high. This is a rise of 8% over the previous quarter. Profit before tax was INR 132 crores for this quarter as compared to INR 124 crores in the previous quarter and INR 120 crores for the same period last year, but adjusted for the effects of the ESPP. That is a rise of 6% over Q2 and from 10% over the same period last year, marking a continuation of the profit growth that we saw in Q2 and is the highest profit before tax of any previous quarter. The profit after tax for the group was INR 109 crores versus INR 101 crores in the previous quarter and INR 109 crores versus a normalized INR 92 crores a year earlier. This is a rise of 9% over Q2 and an 18% improvement over the same period last year. And the profit after tax and minority interest, in other words, the profit that is available to profit after tax that is available to common shareholders, was INR 102 crores for Q3 versus INR 94 crores in Q2, and this can be compared on a like-for-like basis to INR 85 crores for the same period last year. That's a rise of 9% and 20%, respectively. We believe that this marks a clear return to our profit growth despite a very shaky peak COVID effective start to the year in Q1. And we think that this is a reinforcement of the trend that took place in Q2. The earnings per share for the quarter comes in at INR 2.90 per share and a cumulative INR 7.49 per share for the 9 months of FY '21, '22. On the basis of this improved result and the confidence that business conditions have now stabilized, I'm also pleased to report that the Board has declared an interim dividend of INR 2 per share. So I'd now like to go through the underlying segment numbers. As far as the liquid division is concerned, the revenues for Q3 were INR 68 crores versus INR 64 crores in the previous quarter and INR 57 crores a year earlier. That's an increase of about 5% from the previous quarter, but a rise of 19% as compared to the same period last year. Q3 EBITDA remained flat compared to the previous quarter, and -- as against INR 39 crores a year earlier. That's a rise of 18% year-on-year in the EBITDA for this division, reflecting the impact of the capacity additions at Kandla and Mangalore and Haldia. Coming to the Gas Terminal segment. In Q3, revenues were INR 1,146 crores versus INR 571 crores in the previous quarter and INR 1,489 crores in the previous year. The EBITDA for the Q3 was INR 113 crores versus INR 101 crores in Q2 and INR 108 crores a year earlier, which represents a rise of 11% over the previous quarter and 5% for the same period last year. We continue to see a rebound for the gas division with most of the market segments in this division, improving as I will now explain with the sales volume analysis. And starting with throughput volumes. The LPG volumes for the quarter, and handled at our terminals -- 3 terminals of Mumbai, Haldia and Pipavav rose to 752,759 Metric Tonnes versus 737,770 Metric Tonnes in the previous quarter. Haldia had good volumes and Mumbai continued to operate at full capacity with IOC, HPCL and BPCL, all bringing imports to Mumbai. The rail gantry at Pipavav continues to perform well with all 3 companies handling product at that facility and is delivering considerable cost savings to our customers, which is driving the improved volumes at Pipavav. The Bulk Industrial segment delivered 29,662 Metric Tonnes in Q3 versus 23,545 Metric Tonnes in the previous quarter and 23,250 Metric Tonnes a year earlier, representing a 26% growth over the previous quarter and a 28% growth over the previous year and margins remain stable. Commercial & Domestic Cylinder segment, which sells to hotels, restaurants and small-scale industries, under the Aegis Puregas brands and to the domestic household segment under the Aegis Chota Cikander brand, was steady at Q3 sales of 6,414 Metric Tonnes versus 6,313 Metric Tonnes in the previous quarter and 6,042 tons a year earlier. We've now commissioned 2 additional bottling plant -- new bottling plants, which should bring additional volumes to this segment in the coming year. AutoGas sales, on the other hand, were slightly lower at 5,961 Metric Tonnes in Q3 versus 5,987 Metric Tonnes in Q2 and 6,159 Metric Tonnes a year earlier. Our margins remained stable. There are more fuel stations to be commissioned this year, and there's also a good pipeline of around 60 new dealers over the next 24 months or so. The sales volume of the sourcing business was 125,858 Metric Tonnes versus 59,581 Metric Tonnes in the previous quarter. As reported in the last quarter, we expect this to increase. The increase in volumes to continue throughout the next calendar year as we have won significant tenders for the next calendar year -- for this current calendar year actually. So the summary for our Gas division, is that overall volumes, excluding the sourcing volumes, increased by 6% and EBITDA increased by 11% compared to the previous quarter. Let me now turn to the business highlights for the quarter and for the outlook for the rest of the year and an update on the CapEx plan. As far as business updates for this quarter are concerned, we're now in a position to commission -- we have commission, sorry, another 2 LPG bottling plants at Wada and Jamnagar during the current quarter to support the rollout of our LPG retail network. We have commenced work to set up another bottling plant at Pipavav, which should be commissioned shortly. During the quarter, Pipavav Port continued its work on making the LPG jetty compliant for handling VLGCs with completion expected by June of 2022, which, when completed, will further improve the competitiveness of Pipavav Port as an LPG logistics hub. Kandla Oil Jetty # 7, which also will be VLGC compliant, the work continues and is expected to be commissioned as to report by September 2022. Work by the IHBL Company, which is the joint venture between in Indian Oil, Hindustan Petroleum and Bharat Petroleum on the Central India LPG pipeline or the KGPL pipeline, to which, if I can remind everybody that both Kandla and Pipavav boards are connected as will be our LPG terminals, continues in full swing. And according to the company, Phase 1 is expected to be completed by December 2022. So that brings me to the outlook for quarter 4. Both Gas and Liquid segments continue to perform well. And it is our expectation that the next quarter sales volume will continue to grow in line with Q3 as will the earnings. As far as our projects are concerned, the Kandla project is progressing well, and we fully expect to be commissioned by March end as reported last quarter. The additional Jetty pipeline at Haldia has now been commissioned and will improve the efficiency of operations at Haldia, further strengthening its competitiveness. An additional Jetty LPG pipeline -- Jetty pipeline at Mumbai has also been commissioned, which will also improve -- substantially improve the efficiency of LPG operations at Mumbai. And the initial project work has now commenced on some of the expansion projects, which we announced in the last earnings call, and we will have more details in the next quarter sometime in the month of May. As far as the Aegis Vopak joint venture is concerned, everything is going smoothly. We expect -- we continue to make progress on completing the transaction and remain confident that all formalities will be completed by the end of this fiscal year in -- by March 31, 2022. So that concludes my presentation, and we can now take questions. Thank you.

[Operator Instructions] The first question is from the line of Lavanya Tottala from UBS.

I want to know the utilization level of Pipavav with the rail gantry operational? And what will be the potential increase in volumes after VLGC contract? And by when VLGC, we are expecting it to complete?

As far as the VLGC operations are concerned, the Board has sort of informed us that the Jetty will be VLGC compliant by the end of June 2022. And once the Jetty is complete, customers will be -- who are already using the Pipavav port because of the excellent rail connectivity to bringing cargos to [Indian ] VLGCs to the port. As far as the utilization is concerned, specifically for this particular quarter, we don't generally give each port. We don't break out every single port. And so -- but I can assure you that Pipavav remains an extremely competitive port, and we are expecting solid volume increase to that facility.

Okay. Okay. Got it. And on Haldia, so with the improvement in volume this quarter, are we close to the normal levels before -- as we were doing before?

Could you repeat? Are we close to the which level?

Haldia. Haldia. Haldia volumes.

Yes. Yes. So Haldia volumes, but you said are we close to something?

Are we close to the normal levels before the exit of BPCL?

Yes, yes. Yes, I think I'm really pleased to report that despite the stumble that we took as a result, fully anticipated, of course, that BPCL, once they commission that terminal they will be exiting, I'm really pleased to report that Haldia has bounced back really nicely. And we are more or less recovered a significant portion of those volumes, primarily due to the fact that HPCL has been performing extremely well in that region. And we are confident that we are fully back on track, especially in next quarter and there on. Murad, do you want to comment anything on that?

Yes, you have put it right. Very shortly, we should be back to the levels where we were when BPCL was doing the throughput. I think by next 2 quarters, we should be back to the levels when BPCL was there, doing business at Haldia.

Okay. Got it. Got it. And if I may ask one last question. The new bottling plants, which are coming up. So can we get any sense on the capacity of that and the incremental volumes -- potential incremental volumes that we can get from the new bottling plant?

I think at this point, we are not sort of ready to give out individual bottling plant volumes. But the purpose of bottling plants is generally: a, to provide support to our retail network. Because in retail, we [ hire ] distribution footprint. And the quicker you can deliver cylinders to your customers, the more your sales improve. So the bottling plant strategy is really to support our retail network. And I think we can probably track the impact of each bottling plant through additional retail volumes, which we do -- which I alluded to in my presentation. For example, you saw that we had the Industrial segments volumes as well as in the [indiscernible] segment, the Aegis puregas segment. So as we roll out additional bottling plants, you will see the numbers tracking very nicely through the retail numbers as well.

The next question is from the line of Priyankar Biswas from Nomura. As there is no response from the current participant, we'll move to next question from...

Hello? Am I audible now?

Yes.

Yes. So my first question is in Kandla, are we facing any issues related to commissioning? Because what we hear is that there are some approvals spending from Getco or some other regulatory bodies. What exactly is the nature of the issue right now that is presenting a full-scale commissioning at Kandla, the LPG?

We did face issues. We're probably at -- if I can say that in the last -- in the last few months, we did have an issue actually during the whole commissioning of the project because, unfortunately, we were hit with COVID-related issues and so on. I think as far as I'm concerned, we have all the regulatory permissions. There are no real pending issues. Welding is going on at full swing, and we expect to commission by March 31 as we anticipated. Murad, do you want to add any comments?

Yes. I mean we are all set. There are no issues. We have all the approvals, and we should be in a position to commission by 31st of March.

And so on that line only, so what would be the absolute first year volume that you expect, like in FY '23, assuming that Kandla would be there for the entirety of the year? So what ballpark can we estimate?

Well, in our budgeting, we anticipated roughly the total throughput capacity of Kandla about 4 million tons. And we anticipate on a first year run rate of roughly 25% capacity utilization, which would mean a 1 million ton run rate.

Okay. And sir, if I may ask...

Assuming that when we commission and gas up the terminal, there are no other teasing problems and so on, which, of course, in a complex gas plant, we have to be extremely careful. But on the assumption that, that goes on smoothly, that's what our plan is.

So conservatively, even if, let's say, there are certain delays or let's say, some commissioning issues, as you said, it's been a complex plant. So would it be fair to say that in FY '23, we should be at least doing something like a 0.7 million ton plus? Would it be a fair assumption to make at least?

No. I think that's what our expectation is.

And sir, on this retail coverage side, I vaguely remember that towards FY '21 end, we had some coverage of more than 2,000 retail stores. So where are we now? And what are your targets for, let's say, FY '23, '24? I mean -- because I see that you have a significant growth in this retail segment and ambitions there. So how are we looking at this?

Murad, I don't have the exact numbers of our retail footprint right now. Would you happy to do that or?

I think what we say is that we have around 131 auto LPG stations. And you can see our presentation for the distribution network, that is there now. So, we don't usually give the numbers of the outlet. So if you look at the presentation, the number of distributors for packed cylinders -- just give me a minute.

Yes, you have mentioned 254, I think.

Exactly, yes. So 254 is where we stand now and 131 on the Auto LPG station. So you will have these numbers updated every quarter. And that is the coverage we print.

Sir, what you are trying to get is more of a sense like on these numbers only, let's say, on FY '23, '24, like what is the ending rate we can expect? So this is more like to help us assess that how fast distribution can go? So I'm largely...

[indiscernible]for packed cylinders grew 25% to 30% every year in the network. That's the kind of growth we have as far as network and reach is concerned.

Okay. Okay. So, maybe broadly, we can assume that sort of a volume growth for distribution maybe for the next couple of years?

Absolutely. That is what we expect.

The next question is from the line of [ Vinesh Sham Lal Jason ] from JM Financial.

Hello?

Yes, go ahead, please.

My question has been the same historic question, which I've been trying to ask you also, thank you again for it. What's wrong with the capacity utilization in the logistics business for gas being so low? If I turn back the clock and look at the third quarter of F '20, we were at about 958,000 Metric Tonnes. COVID has come and hopefully gone. And still, we are at 753 for this quarter. So what does it take for us? I know you did say to a couple of colleagues that in the next couple of quarters with BPCL coming up, we should be going back up. But I'm trying to realize that with utilize rate with capacity is increasing with us being close to 9.6 million tons, when do we touch a production for a year of, let's say, 6 billion tons? So that's my first question. Let me stop here.

Yes. I think, first of all, of course, we haven't yet commissioned our Kandla facilities. So out of the 3 LPG facilities that we have -- currently have, Mumbai continues to function at full capacity, very strong. Haldia was, I think, higher capacity. We took a bit of a stumble with the withdrawal of BPCL, which I mentioned is not unexpected. And BPCL was an important, obviously, customer. But the moment after a delay of several years that they commissioned their terminal, obviously, they pulled out that business. So I think one could regard the extra volumes that we did in Haldia as a bit of a bonus. But as I mentioned, the Haldia terminal has now -- I think our stated capacity is 2.5 million tons, Murad, if I am not mistaken? And we are basically recovering this in the next quarter, maybe the next 2 quarters, more or less all the business that BPCL withdrew into their own terminal because of the strong organic growth happening in the eastern part of India. Pipavav has been a little slower than we had anticipated, but that's for a few reasons. One is that we were hit by an important cyclone, which damaged some of the facilities. And at the port # 2, there's been a shortage of medium-sized gas carriers. And so the conversion to handle VLGCs, which is the cheapest form of transport of gas and obviously, customers would then prefer to bring those, has taken a little longer by the port than what we had anticipated. But in summary, I would say that if one can foresee that Haldia is returning back to the pre-BPCL volumes and Pipavav with the commissioning shortly of the VLGC Jetty and our rail gantry will be pretty much going back to the trend that we had anticipated. I'm not sure that we are facing a problem of capacity -- low capacity utilization. I think there's no fundamental issue of demand or anything like that. It's some currencies that happened all at the same time. But we remain confident that between these 3 terminals will be -- which are -- we'll be fully back on track with a strong growth. And I would say that we will be probably -- at the 4 million ton run rate next year once Kandla gets commissioned.

So pardon me, I'm just going to push a little bit more out here. So we were at the 4 million run ton rate 2.5 years ago before the commissioning of Kandla. So are we saying that even post Kandla commissioning, 4 million ton run rate is what we are expecting in the next 2 years? Because I'm assuming when you're saying next year, that means the entire utilization of that 4 million ton would come only in F '24?

Can I take that Mr. Raj?

Yes, go ahead. Yes.

Let me just clarify here. What you are looking at is only 1 quarter in 2019, '20 of 958,000 throughput. You see that is an abnormal throughout, and it can happen for various reasons. One of the reason could be if a refinery closes down for some reasons, whether it is maintenance, a fire or whatever, then there is a whole shift from local production to imports. So that was the reason for that particular quarter to do that kind of throughput. It's not the trend. If you look -- if you just ignore that particular quarter, the rate -- run rate was and always has been improving quarter by quarter, if you look at the trend. Now also to explain to you 1 more thing, is that terminal [ capacity ] is not built to last for 1 year, 2 year or 3 years. It is to last the customer for 5 to 7 years. So the growth of capacity utilization is going to be gradual. It will not, for example, let's take Kandla, inspite of putting up a 4 million ton capacity, the first year would be 25% and then would grow to 35%, 45%, 50%. So it will take 5, 7 years to reach 4 million ton. So you cannot simply just say that, okay, you have a capacity of 9.6% when are you going to reach 6 million ton? As far as we have already gone on record to pay, that Mumbai is operating at full capacity. Pipavav is all set because of the Jetty becoming VLGC compliant, the rail gantry operating very smoothly and efficiently and bringing value to our customers. And Kandla Gorakhpur pipeline connections. All things are going to lead to a huge improvement in Pipavav, but it's not going to happen in 1 quarter, 2 quarter. It takes time, maybe next 8 quarters, you will see a huge difference in Pipavav to put way above the capacity which we are -- which we have printed or which we have taken out, it could go way above that because of all of these factors. As far as Haldia, again, 2.5 million ton was not expected to reach in 1 year or 2 years. We just started 3 years back. Again, it's a journey of 5, 7 years. And you will see the throughput reaching the capacity that we have installed. So if you understand all of this, you will understand the growth. Key factors, like I said, in 2019, '20, any one refinery has a problem then you get all the throughput, but that is abnormal. Same goes for Haldia. We had BPCL as a new customer, as a customer which was not expected because they had delays at their terminals. So once their terminal was commissioned, they exited out, which was okay. So you have to understand terminal to terminal, then you will understand the throughput...

Totally appreciate that. I thought the demand has, hearing from you on the call historically, have been so good that utilization could be faster. Maybe my expectation was too high as well?

So demand growth has always been 6% to 10%. And you will see terminal by terminal, those kind of growth.

Since you mentioned 8 quarters, just the last question, and I'll let it be. Let's talk about 8 to 12 quarters ahead. So will we then start seeing a 6 million ton to 7 million ton capacity overall utilization? Because by then, at least Kandla would have had about 8 quarters to work as well if it starts sometime next year? So then do we say that the current 3 billion, which is going to go to 4 million probably next year end, should start moving to that number? Or is that also difficult to address, sir?

Expected, but we don't give guidance of such sort. But if you understand the kind of things that we are doing to enable that, that is absolutely what is expected to happen. So it will grow and it will grow according to each terminal, the kind of facilities and the kind of what we are doing at each of these terminals. There will be improvement according to those kinds of...

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

When we say that our Haldia [ revenues ] have shown a significant improvement this quarter. If I see total logistic volume quarter-on-quarter, it's more or less similar and we are saying Mumbai is at full. Then it doesn't seem that Haldia has seen significant volume improvement? Or am I wrong somewhere?

No, I think my comment was basically in relation to the fact that when we lost the BPCL business, which broke down the Haldia utilization, we have, as I mentioned, we have recovered a lot of that volume because HPCL's throughput has recovered as their market share and their volumes in the eastern part of India has improved, they've started bringing in more cargo. So I think it was more in relation to that. But basically, both Pipavav and Haldia have bounced back. If you see, for example, in Q1, we had quite a low throughput of 568,000 Metric Tonnes, which we bounced back in Q2 to 738,000 Metric Tonnes and the trends continue. So I think my point was that the trend of improved utilization throughout the 3 terminals that we have continues.

Okay. And sir, when you say Mumbai is operating at close to full capacity, are we taking its throughput capacity at 1.1% or 1.5% because 1.5% then it's not possible to have December?

1.1%

Hasn't Mumbai increased to 1.5% post the Uran – Chakan pipeline connectivity, which started in June 2020?

It was below that when the pipeline started, so there has been an increment due to the pipeline operation. And you will continue to see some improvement in FY '23.

Okay. So FY '23, what capacity are you indicating would it be 1.5% or lower than that?

1.5%. We should -- we expect that.

Okay. Okay. Understood. Understood. And sir, have you seen any improvement in [indiscernible] our LPG business, be it distribution or be it logistics, because return number has been an all-time high. So have we gone above the rate of sales, which you've been saying in the past of around 1,050 per ton. Has the margins increased over and above that? Or has the increase been on the distribution side?

No, I would say that the margins on throughput volumes continues exactly there's -- no real change in that. We have had good margins on both the liquids as well as the retail side of the business. Those remain quite healthy.

So given the volumes and using those -- that range, I mean, our EBITDA -- reported EBITDA is a bit higher than that, That's why my question.

Yes. Sorry, I couldn't understand what your comment -- it wasn't clear. What would you say?

I'm saying that the segmental EBITDA, which we have reported. If we work out using the volumes and that range of EBITDA margins, the EBITDA is coming a bit lower than what we have reported. So I was just trying to understand was -- I mean, is there any margin increase?

No. Let me take a -- so let me answer that. As far as gas EBITDA is concerned, it is a sum of throughput EBITDA, which, like Mr. Raj said, have not changed at all. They are the same, which is INR 1,000 a ton. As far as packed cylinders and auto LPG is concerned, we have already said 1 or 2 quarters back, that these margins have improved significantly during this fiscal year. So which is why the EBITDA level have increased. As you would have seen, the volumes have increased by 5% -- 6%, but the EBITDA has increased by 11%. So obviously, the margins of distribution are the ones that have contributed even bulk LPG where we have been able to secure some procurement efficiencies and reduction in cost of procurement. All the time, we are always on a lookout to get either our costs reduced or realizations improve as far as distribution is concerned.

And this is this particular fiscal.

Yes, sir, understood. And when you say that Q4, the run rate should be similar to Q3, you mean the growth which we have seen in Q3, Q4 should be -- should see similar growth?

Yes, yes.

[Operator Instructions] The next question is from the line of Sarvesh Gupta from Maximal Capital.

This is Karan. I had a question regarding the ALDS volumes. I think that close to about 5,960 Metric Tonnes, which is down 3% year-on-year and roughly flat quarter-on-quarter despite the addition of 7 new stations. So I just wanted to understand your thoughts on this? And did we also see margins close to INR 10,000 per ton EBITDA in this quarter?

Yes. Maybe I can take the volume question, and Murad, you can talk about the margins. But as far as the volumes are concerned, yes, to be honest, I had -- I was a little disappointed at the fact that there was no increase in volumes despite adding a few new stations. Of course, now we didn't -- every station takes a bit of time to start up and ramp up and so on. But I think we remain confident that the recovery in transportation, there has been a bit of a choppy recovery in terms of people moving around and so on because of what has happened in COVID. I think we can probably safely say that COVID is now behind us. So we expect sort of a full recovery in the auto LPG volumes and the new stations that we have commissioned already to start yielding results. So I'm not going to hide behind anything. I'm not happy at all with those ALDS numbers, and we are pushing very hard to improve them. But we still believe in that, this segment yields an important margin and is an important part of our LPG story. So we will continue to push. And hopefully, we'll get better at it after a few quarters. And Murad, you can talk a little bit about the margins...

And let me add here on volume also that if you -- I mean, of course, it is not an excuse, but if you see last year, Q3, COVID was behind. It was September end and this was October, November, December and the volumes improved last year, Q3. Current year, Q2 was after Delta. So it was good. But in Q3, this year, again, we got a scare of Omicron and -- in the month of December. And there was a little bit of a panic. And probably we lost a little bit of volume on account of that. As far as margins are concerned, I think it's very healthy, and it is about INR 10,000 a ton. And we expect it to continue for the rest of the fiscal.

Sure, sir. I appreciate your comments on that. And I think you mentioned that you saw some issues from COVID in terms of volume pickup. So is that to say that now that you mentioned it's behind us, could we see better growth in incremental volumes going forward?

Yes, yes, absolutely.

Okay. Okay. Understood. And one more question regarding the ALDS segment. So we are targeting 60 new stations by FY '24 as per your comments. So that would lead us close to our target of 200 stations. So what kind of CapEx are we envisioning for this? And if you could give some color on which regions or which geographies we are targeting to set up these balanced 60, 70 stations?

I'm just wondering 60 stations in 2 years?

Yes. There are 60 stations which have been signed up and are to be executed over the -- over next 24 months and these are spread over 14 states where we have our presence as of -- as on date. And out of 60, we don't expect all of them to materialize, these are sign-ups. And usually, we end up doing half of the sign-ups. So you can say that 30 stations is probably what would materialize in the next 2 years. And investments or CapEx on those, these are all franchise driven and investments come from the franchise. So very minimal CapEx we expect. And yes, volumes, of course, will improve on account of those stations.

I'd just like to add that the investment is generally speaking, on our branding. So for example, the canopies and all of that stuff is where the company makes the investment to promote the brand.

Got it. And so the incremental -- sorry.

Yes. Go ahead, please.

All right. Now so that the incremental stations, we could expect similar sort of volume growth and trajectory relative to what we have currently. Is that fair to say? Or do you expect them to be higher volume throughputs or?

No, I wouldn't say necessarily that there would be any higher or lower. I think it's pretty much consistent with what we have so far.

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

Sir, on the PPT, you mentioned that Auto Gas EBITDA has improved to INR 10,000 per ton. So just wanted to understand what your EBITDA pattern in commercial and retail distribution will be now?

That -- if you are talking about Packed Cylinders, then that would be somewhere around INR 7,000, INR 7,500.

Okay. And what it used to be, sir, last year?

It was just under INR 5,000.

Got it. Got it. Understood. And sir, secondly, your EBITDA margin for...

Can I just -- sorry, can I just add to that, the reason for that increased margin is also that as we roll out our own bottling plants and so on. Obviously, we are able to capture some more efficiency and improvement in margin as a result of that.

But the main reason will be the increase in LPG prices, right? So I think you keep that slight margin improvement happens with an increase in LPG prices, is that right?

No, I wouldn't say that it's because of LPG price. I mean there's always a little bit of price effect, but not -- that's really -- it's squeezing out more efficiency out of our -- as we expand the distribution network.

So you basically mean that these margins are sustainable even if the LPG prices go down?

Yes, I think so.

Okay. Understood. And secondly, sir, on the liquid terminals, your EBITDA margins have been falling for the third straight quarter. So if you can point out any reason for the same? And what is the sustainable margin we should look in the liquid business?

Sorry. Could you repeat that question? I [indiscernible] a little bit.

Sir, the liquid terminals, I think have reported a decline in margin for the third straight quarter. So I just wanted to understand what is the reason for that? And any sustainable margin we should work with for the liquid segment?

Let me answer you on this. The EBITDA margins, if I remember, is 47%...

68%. Yes, sir.

68%. It is around 70%. Please understand we have always given a guidance that liquid margins are anywhere between 65% to 75% depending on what types of products we get to store in a particular quarter. So getting 70% in the quarter is very healthy EBITDA margins. Historically, if you go and see, we have been growing 65%. But from the current year, we have gone on a range between 70% to 75% depending on what kind of products we get to store and [ handled ] during a particular quarter.

Understood. Understood. And lastly, sir, what is the CapEx you've done until now and FY '22 and what is left for fourth quarter? And also if you can give the CapEx plan for the Aegis stand-alone business, not for a joint venture, but was the stand-alone, like what is the CapEx plan you're looking for the next year?

As of now, we have already done most of the CapEx, including Kandla for the year. And we have just announced the next round of CapEx of INR 1,250 crores that would obviously be under the JV. As far as stand-alone is concerned, we are yet to take up proposals in the Board, and we will soon come out and with the details of those.

Got it, sir. So can you remind us like what was the CapEx for FY '22, the Kandla terminal, what you have done?

Kandla terminal was INR 350 crores.

Ladies and gentlemen, due to time constraint, we will take that as a last question. I now hand the conference over to Mr. Raj Chandaria for closing comments. Thank you, and over to you, sir.

Thank you very much. So as I guess -- just to conclude, I'd like to -- the message I'd like to convey is that we are back on track. We firmly believe that with all the improvements that have taken place and are taking place as far as the infrastructure facilities at Pipavav, the new terminal coming up at Kandla and also the improvements that are taking place at Haldia. Our LPG business is back on track and of course, not to forget the improvements that have been made in our retail distribution network and continue to be made on a day-to-day basis. So we remain very confident that we are back on track. The overall story remains intact. The Vopak joint venture is for which we signed in July, we will be concluding it and financial closure by the end of the year, 31st March, and we remain confident that, that is going to be a really important part of the story going forward. And I think that really concludes it from my side, and we look forward to speaking again in the month of May. Thank you.

Thank you.

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