When The Going Is Good

After a near one-year hiatus, the Chandaria brothers, Raj and Anish, have cashed in on the unrelenting rally in the Aegis Logistics stock. After gaining 132.83% and 22.63% in CY15 and CY16, the stock has continued to sizzle in CY17, surging 45.97% to Rs.187.5. The year-to-date performance stands out in comparison to the 21.62% gain on the benchmark Sensex. On July 19, the promoter group entity Huron Holdings sold Rs.58 crore worth of shares, that is, 33 lakh shares at an average price of Rs.175.24 a share.

This is the first sale by the promoter entity during the year, after its previous sale in August 2016. Huron’s stake currently stands at 33.28%, while the overall promoter holding has declined from 62.93% in June 2016 to 61.5% in June 2017. Incidentally, both domestic mutual funds and foreign portfolio investors (FPI) have increased their stake in the firm. The share of mutual funds increased from 1.33% to 1.81%, while the share of the foreign portfolio investors has more than doubled, from 5.38% to 11.84% over the past one year. Among foreign investors, Small Cap World Fund’s stake rose from 1% to 3.53%, while the share of Credit Suisse (Singapore) declined from 2.03% to less than 1%, during the same period.

The country’s leading logistics firm is involved in terminalling of oil products, chemicals and liquefied gases. It operates a network terminals located in Mumbai and Kochi. Pipavav and Haldia, which are connected by pipelines to various berths for export and import of hazardous chemicals, petroleum products, and petrochemicals. The company has seen its PAT clock an impressive CAGR of 43%, between FY13-FY17, even as revenue showed a modest 7% CAGR over the same period. The gas terminal division was the key driver of growth in revenues in FY17. While division saw revenues rise 85%, the liquid terminal division’s revenues declined by 10%. However, analysts expect revenues from the liquid division to improve in the current fiscal as its new capacities get commissioned at the Kandla and Haldia ports. Though the implementation of GST is expected to give a fillip to the logistics sector, at 30x one-year forward the stock is not exactly trading cheap.