Aegis Logistics Ltd

NSE:AEGISCHEM

Earnings Call Analysis

Stellar Earnings with Operational Highs

The company celebrated a milestone Q2 FY '24, achieving a record 1 million metric tons of LPG throughput in a single quarter, a 48% PAT increase over the same quarter last year. New capacities have come online, and the INR 1,750 crore investment plan is progressing, promising new terminals by FY '24 end. Despite a 43% revenue decrease due to lower volume and prices in the sourcing business, unaffected profits and robust financial position showcase resilient operations. The company is confident in its growth, leveraging its position as a consistent LPG supplier and exploring opportunities in alternative fuels and energy sources for India's sustainable future.

Record Throughput with Positive Financial Highlights

For the first time ever, the company achieved a throughput volume exceeding 1 million metric tons of LPG in a single quarter, showcasing a significant operational milestone compared to when 1 million metric tons represented an entire year's throughput. This operational highpoint contributed to a substantial financial performance, with EBITDA reaching INR 231 crores and profit after tax climbing to INR 150 crores, marking a 48% increase over the same quarter last year.

Investment Program Advancing Operational Capabilities

The strategic INR 1,750 crores investment program, announced in June 2023, is progressing as planned, with new capacities being added. This includes the commissioning of additional storage spheres at Pipavav and an LPG bottling plant at Kandla. Furthermore, the development of new liquid terminals at JNPT, along with expansion in Mangalore and Kochi, reinforces the company's commitment to operational growth and efficiency.

Liquid and Gas Divisions Experience Robust Growth

The company's Liquid division once again posted record results with Q2 FY '24 revenues of INR 117 crores, up by 10% year-on-year. The Gas division equally demonstrated record volumes leading to an impressive 32% increase in EBITDA compared to the previous year. LPG handling across all terminals saw a 23% surge, underpinning the strong performance across the board.

Sourcing Business Declines Amidst Overall Positive Trajectory

Despite the overall growth, the sourcing business observed a year-on-year decline of 45% in Q2 FY '24, with volumes dropping to 174,000 metric tons from the previous year's 228,000 metric tons. However, there is an anticipation of future increases in both sourcing volumes and prices that should strengthen the financial position.

Projected Growth and Focus on Reliability

While the company typically refrains from providing volume guidances, there is an expectation to maintain or slightly improve the current volume run rate. As a result, the target appears to be nearing 4 million metric tons. Additionally, the company positions itself as not just a supplier, but a dependable partner in energy, emphasizing the goal of being a consistent and reliable provider rather than solely focusing on extracting better prices.

Diverse Industrial Applications Solidify Market Demand

The company's LPG offerings have been successfully integrated into various industrial processes such as paint shops, automotive manufacturing, and steel production. This diversity in application solidifies the demand for LPG in the industrial sector, where it offers a competitive alternative to natural gas.

Earnings Call Transcript 2024-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the Aegis Logistics Limited Q2 FY '24 Earnings Conference Call.

[Operator Instructions]

Please note that this conference is being recorded.

I now hand the conference over to Mr. Raj Chandaria, Chairman and Managing Director. Thank you, and over to you, sir.

[Raj Chandaria, executive]

Thank you very much. Good evening. I'm joined by our Chief Financial Officer, Mr. Murad Moledina, and we will be presenting the Q2 FY '24 Results.

At the end of our Q1 Earnings Call, I had mentioned that the company was very well positioned to continue delivering on its mission, which is to store and distribute bulk liquids and gases in a safe and sustainable manner. And I'm pleased to report that in Q2, we did just that and in the process have notched up an important milestone. For the first time, we have delivered a throughput volume of 1 million metric tons of LPG in a single quarter.

And it was only a few years ago when we celebrated the crossing over 1 million metric tons throughput for the whole year. So the liquids business has also performed very well with all the sites operating at a high capacity utilization, including the newly commissioned capacity in Haldia and the newly acquired capacity in Kandla.

Now this solid operational performance has enabled us to deliver a strong set of financial results for the quarter, with EBITDA of INR 231 crores and profit after tax of INR 150 crores, representing a 48% increase over the same quarter last year. Mr. Moledina, our CFO, will provide more details later in the call. I would like to provide an update on the progress of the various growth projects since we reported at the end of Q1.

Now as a reminder, these are the projects that we are implementing as part of the INR 1,750 crores investment program that we announced in June 2023. The 2 additional spheres at Pipavav have been completed and commissioned in this quarter, representing an additional static capacity of 3,700 metric tons, and these are now ready for business in Q3.

The LPG bottling plant at Kandla has been completed in this quarter as well. The new liquids 110,000 kiloliter terminal at JNPT is progressing well and expected to be operational by the end of FY '24. New liquids capacity expansion at Mangalore and Kochi is well underway and also expected to be operational by the end of FY '24. And the 2 major cryogenic LPG projects at Pipavav and Mangalore of 45,000 metric tons and 85,000 metric tons respectively, are also on budget and on time. And of course, these 2 projects represent the bulk of that INR 1,750 crores investment program.

On a general note, we continue to seek opportunities, whether in the form of acquisitions, brownfield expansions or greenfield sites and also in the area of sustainable fuel and new energy that are consistent with our vision of supporting India's transition to a more sustainable future. Now looking forward, we expect the strong momentum we have seen in Q2 to carry on for the rest of the year and with the various projects that are underway, we are confident of executing really well on our mission as we move into next year.

I'd now like to hand over the line to Mr. Moledina, to present the financial performance in detail. Murad, over to you.

[Murad Moledina, executive]

Yes. Good evening. Both our divisions delivered a strong performance in the last quarter driven by the highest lifetime revenues and profitability in the Liquid division once again and highest throughput volumes in the Gas division.

For the group as a whole, EBITDA for Q2 FY '24 was INR 231 crores, an increase of 26% compared to the same period last year. Profit after tax increased by 48% in Q2 FY '24 to INR 150 crores compared to INR 101 crores in Q2 FY '23. Earnings per share also increased to 3.62% as compared to 2.66% in Q3 FY '23, a gain of 36%. Overall, revenues in Q2 FY '24 did decrease by 43% on a consolidated basis, but that was driven mainly by lower volume and prices in the sourcing business.

I would like -- now like to provide you some more details on the individual segments. Liquid has delivered another record performance in this quarter. The revenues for Q2 FY '24 were INR 117 crores, an increase of 10% year-on-year basis. We delivered the highest ever EBITDA for the quarter at INR 79.5 crores versus INR 69.4 crore in the previous year, which is a modest increase of 15%.

This improved performance can be attributed to the new capacity coming online as well as acquisitions. Gas has also delivered record volumes in our logistics business, and we experienced stable growth in our distribution business, resulting in EBITDA growing from INR 114.4 crores in the same period last year to INR 151.2 crores for Q2 of this year. This represents a 32% increase.

Now let me give you volume details of each subsegment. Throughput volumes. The LPG volumes for Q2 FY '24 handled at all 4 terminals Mumbai, Haldia, Kandla and Pipavav were 1.02 million metric ton versus 830,000 metric tons in Q2 of FY '23, an increase of 23%. This is a lifetime record performance of the subsegment of the business. There are a number of factors that have contributed to this. Our operations at Haldia port getting normalized, Pipavav upgrading the Jetty and is now handling several VLGCs. Mumbai continues to operate at full capacity with all 3 NOC bringing imports and the new terminal at Kandla also fully operational and delivering on our expectations.

Distribution volumes. We had a stable growth in our distribution business in Q2. The volumes increased by 13% as against Q2 FY '23 volumes. The commercial, industrial and auto segment, combined handle, 131,000 metric tons in Q2 FY '24 versus 116,000 metric tons in Q2 of FY '23. The margins of this division also remained stable. With Kandla LPG terminal operationally stabilized, we believe that the distribution business will now continue to register steady growth.

Sourcing volume. The sales volume of the sourcing business in Q2 FY '24 was 174,000 metric ton versus 228,000 metric ton in Q2 of FY '23. Overall, revenues in Q2 FY '24 were INR 1,118 crores versus INR 2,044 crores in Q2 of FY '23, a decline of 45% year-on-year. This was driven mainly by lower sourcing volume as well as lower international LPG prices as compared to the last year. We are not concerned by this as it has no impact on our profits. However, we do expect the sourcing volume and prices to increase and stabilize in the future. The financial position of the company remains robust with low debt, strong cash flows and a solid balance sheet.

With this, I now hand over this line to the moderator to start the question-and-answer session.

[Operator]

[Operator Instructions]

We have a first question from the line of Ashwini Agarwal from Demeter Advisors LLP.

[Ashwini Agarwal, analyst]

Congratulations. Good set of numbers. So the question I have has to do with the evolving energy landscape. Of late, there's been an increasing amount of concern in the natural gas market, where there is obviously a fear that the consumption and demand for natural gas will decline in the years ahead as more of electricity or green initiatives becomes available.

At the same time, the production of natural gas from Indian fields has also started to increase. So I just wanted to understand how should we think about that having an impact on the LPG market and into your transportation and distribution business in LPG. How do you see this risk playing out over the next couple of years?

[Raj Chandaria, executive]

You want to answer that?

[Murad Moledina, executive]

Well, let me add -- let me answer this and then Mr. Raj can add in case he has any other point. So there is a very distinct difference between LNG and LPG. LPG, 90%, almost 90% of the consumption is towards cooking gas. It's not for power or electricity. However, I can tell you that as far as calorific value of LPG versus LNG is concerned, LNG is 75% less than propane, which is one of the gas in LPG basket.

As far as LPG is concerned, in fact, what we have seen since last year is a distinct realization that propane and LPG are really now coming into forefront of being a very good alternative fuel for industrial use. So we have seen a huge increase as far as consumption in addition to cooking gas, which, of course, LPG is mostly used for in India. We are seeing a very good demand for propane and LPG.

As a fuel for industrial use, the classic example is Morbi where once we started our Kandla LPG terminal, we have been doing a lot of distribution bulk sale to that industrial cluster. And now we are looking for more and more industrial cluster to deliver propane and LPG as an alternative fuel. So I think as far as, of course, as you said, about supply, LPG and propane do not fall in the same category as LNG, we can easily import LPG and propane into the country. I don't know if Mr. Raj would like to add anything.

[Raj Chandaria, executive]

Yes. No, I think you've covered most of the points. I mean we are pretty confident. This is not a new debate. LPG and LNG or natural gas coexists around the world. India is a pretty unique situation that LPG actually has been the main fuel for the last 50, 60 years. And it is only recently that LNG and natural gas has started coming in. LNG and natural gas are much more difficult to handle, much more capital-intensive projects.

And we don't believe that it represents a serious threat to the growth of the LPG business. Both will coexist, both will expand. The demand for energy -- of cleaner energy is definitely there. And in fact, we think that the LNG price and the LNG supply will be a little more erratic because of the big switch to non-Russian sources of LNG in Europe.

So that's always going to be a problem for a country like India. When there's a big surge in demand from Europe over the winter, cargoes get diverted. And so industrial customers here are looking for alternatives and more reliable, consistent supplies like which we can give through LPG. So I think I'm not particularly concerned about that.

[Ashwini Agarwal, analyst]

The good autogas part of your business be at risk because of the -- what the government is making towards EV, especially in commercial vehicles?

[Raj Chandaria, executive]

No, I don't think so. I mean auto gas, our main market is on the auto rickshaws in auto gas. In any case, it's not a huge part of our business. It's a small and niche part of the business. We continue to sign up dealers for auto gas. Volume growth is slow, is muted. But margins are attractive, and we'll continue to roll out. So I'm not particularly concerned about that one either.

[Operator]

We have a next question from the line of Priyankar Biswas from BNP Paribas.

[Priyankar Biswas, analyst]

Congratulations to everyone on the team for the results. My first question is can you just, first of all, give us the split of the distribution volumes like you used to give like between auto gas and the rest?

[Murad Moledina, executive]

Priyankar, that we are not having it at the moment. Yes, we have stopped giving that breakup because bulk LPG now almost forms part of -- I mean, it's almost 80% of the distribution volumes. And packed and -- auto LPG, yes, is...

[Priyankar Biswas, analyst]

Okay. So on that related line, so my related question is, so what sort of discount right now is, let's say, propane versus natural gas at this industrial [ stress ] Gujarat based on your assessment? And what is your outlook given that winter is coming, so how much this discount can go up?

[Murad Moledina, executive]

Yes. The discount to what? The discount of propane over LNG -- I mean propane over LNG, that was...

[Priyankar Biswas, analyst]

Yes, yes, yes.

[Murad Moledina, executive]

I think what one can say is between 15% to 20% would always be there. the caliper value difference is probably the difference which is there. Most of the time in the year in a few months, that would -- so we can safely say that the difference is between 15% to 25%. So for example, SCM price today would be somewhere around 46% Morbi, if you divide by 0.75 and then compare with the -- and of course, add VAT of 6%. And then you compare with the LPG price coming into the country, you will see this difference.

[Priyankar Biswas, analyst]

Okay. I get that. So that's broadly clear. So what is your expectation, like in the coming few months as you were mentioning that with the winter there would be pressure on natural gas supplies. So in that case, would it be fair to say that -- so the discount will widen like LPG -- propane's discount? And possibly, you can do better volumes in the distribution. So how do you look at that segment?

[Raj Chandaria, executive]

Yes. I think it is expected that LNG price will, of course, go up in the winter. But of course, LPG prices also will go up in the winter. They sort of move in tandem. So I don't think we want to be in the game of predicting exactly quarter-to-quarter. How much extra profit we will make from some kind of trading gains because we're not really in that business. But I think the -- what I can say is that the expectation is that our -- since the opening up of our Kandla terminal and our ability to service the industrial clients in Gujarat has become really strong.

And we are seen as reliable suppliers who have -- always have inventory to deliver when you need it. And I think a lot of customers appreciate that. I would prefer that we emphasize, Priyankar, that Aegis is a solid, reliable supplier of energy for your industry and of gas rather than trying to see how we can extract better price and so on. Obviously, we'll try our best.

[Murad Moledina, executive]

Yes. But I think just to add, looking at what you said, coming winter and the supply constraints as far as NG is concerned, I can actually safely say that the path is more difficult for NG rather than propane or LPG going forward from year on, yes, definitely.

[Priyankar Biswas, analyst]

So my understanding is then ideally in such again, then the volume should improve. I mean, distribution volumes, let's say, the next few quarters, if that be the case?

[Murad Moledina, executive]

But that also depends on what mix we would like to do because it's a balance between throughput and distribution. So it is not necessary that as you know, supplies always need to be planned, shipping, et cetera. So it depends on a number of factors. But yes, definitely, margins would be looking at what is the ground situation as far as supply of NG and supply of LPG is concerned.

But we do expect a steady -- like we have always said, steady increase in distribution volume year-on-year from now on. Again, I repeat that LPG is becoming our propane for that matter. It's becoming a very good alternative fuel for industrial use. So that is established beyond doubt. We started a year back, and if you look back the last 12 months, I think this is established beyond doubt.

[Priyankar Biswas, analyst]

And then just squeezing in just one last question from my side. So given that you have done 1 million ton plus. So what exit level of volumes are you looking for FY '24? I mean I know Kandla will be ramping and all this considered. So what sort of exit volumes are you targeting?

[Murad Moledina, executive]

We don't usually give guidance on volume. But as you would have seen the run rate, we expect that to maintain or slightly improve going forward in Q2 and Q3. So yes, we would definitely be close to 4 million, it looks like. So we did 3.33, and as we had anticipated last year there will definitely be a growth of 20% from where we were the previous year.

[Operator]

We have our next question from the line of Ankur Shah from Quasar Capital.

[Ankur Shah, analyst]

Sir, can you throw some light on the distribution business? Because like you mentioned that now LPG is becoming a good alternative use for industrial purposes. So can you throw some light, which industries open to using like except for the tile industry, where all in India, we can actually scout for pockets and go there and distribute. Can you just throw some light on that?

[Raj Chandaria, executive]

I think the -- obviously, the ceramics business, as you mentioned, is a big user, but it's been used in paint shops, automotive, steel, number of -- wherever natural gas is being used in industrial applications, pet chems is another one. So I think LPG has a number of industrial uses I mentioned, as I said, steel, paint shops in automotive pet chems. These are sort of some of the alternative uses of LPG.

[Ankur Shah, analyst]

So like from a future growth expansion point of view, have we identified pockets from where we will be further expanding this distribution business?

[Murad Moledina, executive]

Yes...

[Ankur Shah, analyst]

But right now, what I understand it is more primarily Morbi. Apart from that, is there any hope?

[Murad Moledina, executive]

We are also -- we have also started supplying Himmatnagar, et cetera. So there are hubs, but at the moment, we are focused on Gujarat more, but we are supplying in Maharashtra, in West Bangal, Two Steel like Mr. Raj said, Two Steel companies to other companies, which have energy requirement and are using alternative fuels like natural gas or whatever other fuel. Like even in our own terminals, we have replaced furnace oil fuel with LPG for generating, for our tanks. So there are multiple areas.

[Ankur Shah, analyst]

Sure. Sure. And second question is on, sir, any outlook on the Kandla-Gorakhpur execution, like when will the throughput start?

[Murad Moledina, executive]

Kandla-Gorakhpur, I think, is what the NOCs say that they expect the first phase to commission by end of December 24. And the work is progressing well. We also have -- otherwise. So it should start January 25 Phase 1 of KGPL work is in full swing.

[Operator]

We have our next question from the line of Yash Daria from Maximal Capital.

[Yash Daria, analyst]

Sir, just one question because of the geopolitical tensions that we are having with Qatar as of now. So do you see any risk on our business because of that specifically related to both gas and liquid?

[Raj Chandaria, executive]

We've been through this scenario many times in the past, at least 25 years that I've been associated with the LPG business and so on. There's been wars, there's been all sorts of things. So I don't think so. I mean, definitely, there has been an elevation of the prices and some kind of premiums on insurance and so on, which do affect shipping. But I don't think it's going to be a major impact on the underlying business. We might see some elevated prices for a short period of time. But generally, I don't see a problem.

[Yash Daria, analyst]

And what percentage of our in-sourcing would be coming from Qatar?

[Raj Chandaria, executive]

From Qatar, specifically? I don't think Qatar is a major supplier. I mean, we definitely -- we buy cargo from everywhere. Saudi, Qatar, from a whole bunch of sources.

[Murad Moledina, executive]

Oman.

[Raj Chandaria, executive]

Oman, so it's not -- we're not specifically geared towards Qatar.

[Yash Daria, analyst]

But would you have a rough estimate of the percentage business from that country?

[Murad Moledina, executive]

It's basically AG or Arabian Gulf. It's never country specific.

[Yash Daria, analyst]

Understood. And secondly, in terms of our -- the growth plans from here on, so I think earlier, we were looking at 20%, 25% growth overall. So given that we do have some projects, but a substantial amount of capacity expansion is not coming through. So how do you see growth panning out? So for example, in the Gas division, we are not fully utilizing our capacity.

So how do you see that ramping up in the coming year? And in terms of -- and in Liquid division, I think we are already there, and the growth which is coming via CapEx is not very high. So how do you see these capacity expansion projects, et cetera, sort of helping us grow in the revenue terms?

[Raj Chandaria, executive]

So if I understand your question correctly, the -- you're asking that this INR 1,750 crores expansion program that we are currently executing, you're asking, is that going to contribute to our growth? Is that what you're asking?

[Yash Daria, analyst]

No. So for example -- so this INR 1,750 crores, I guess that is coming from end of next year, if I'm not wrong, the impact of that.

[Raj Chandaria, executive]

Yes.

[Yash Daria, analyst]

So that would not help us grow in the next financial year, for example. But in terms of the existing things that we are having in play, I think in Liquid division, the capacity expansion, which is happening is only like less than 10% of our current capacity, and we are fully utilizing it already. And in gas, I wanted to know how will the ramp-up happen given that we are not utilizing this fully?

[Murad Moledina, executive]

So let me take that. Liquid, we were 1.6 million. We should touch 2 million, beginning next year, so that's 20%. So that's done. Liquid, 35% of EBITDA, 20%, that will bring the growth. As far as gas is concerned, we have always said that the assets are never -- the CapEx or the throughput capacity is not put us to exhaust in 2, 3 years. It gradually keeps increasing. And over a period of 7, 8 years, it achieved 100% of the capacity that has been set up.

So all our terminals, except Mumbai, which has already reached its 100%. So be it Pipavav, Kandla, Haldia, we see 2 types of growth. One is a gradual natural growth, which for say LPG is witnessing, which is 12% in imports and 7%, overall. So that will be the natural gas. However, there are several things in each of our 3 terminals, which will also give step-up growth. For example, in Pipavav, when KGPL comes up and is commissioned end of December '24, which is in the next financial year, you will see a step-up growth over there.

As far as Kandla is concerned, the more distribution, the more throughput. We are also connecting there in JLPL pipeline as well as KGPL pipeline and the distribution. We'll also -- you will see step up growth as and when these happen in the next year. And Haldia also. So you will -- we will -- whatever we are anticipating next year and whatever we are saying that we will see a growth of 25% year-on-year looks well on the horizon.

So it is not that only the new CapEx will bring the growth. But of course, definitely the new CapEx like I said, liquid, everything is happening by FY '24 and gas well before FY '25. So those also will contribute. And as far as next year is concerned, of course, this new CapEx will play a bigger role in the growth of FY '26 and FY '27. So maturing of current assets, the growth of the current terminals and the new CapEx would lead us all the way to FY '27, like we always say that we see this visible now on the growth which we always say on a call.

[Yash Daria, analyst]

And finally, sir, on the INR 1,750 crore expansion, what kind of, let's say, project IRR and equity IRR are we targeting?

[Murad Moledina, executive]

See, it is like we -- our hurdle rate is always 15%. And we expect for every INR 100 CapEx somewhere around 20% EBITDA. And we have said that in the past that because we will get or we will aim to get at 0.6, the return of equity would then end up close to -- between 35% and 40%.

[Operator]

We have our next question from the line of Harsh Beria, a professional investor.

[Unknown Analyst]

Congrats for a good set of results. My first question is about Gujarat-Pipavav expansion. So I think Gujarat-Pipavav the port company is investing some [ 90 million ] in building a new LPG terminal. So how does this business work? Do they then put up the terminal for bidding for -- and can we handle the logistics on their behalf? Or does the port handle the logistics or the terminaling operations themselves?

[Murad Moledina, executive]

Yes. Good question. And you're right, both would happen parallelly. So we -- like we have already announced an expansion and setting up of cryogenic terminal with a capacity of 45,000 metric tons in Pipavav, that would be timed with the Jetty which the port is constructing, the LPG Jetty. So the KGPL pipeline, which also has a manifold in Pipavav, the VLGC Jetty being constructed by Pipavav Port and the refrigerated terminal capacity of 45,000 metric tons, which is being set up by Aegis.

So all 3 being set up by different people, for example, KGPL by the IHB and the Jetty by Pipavav port and the cryogenic facility by Aegis. However, currently, the Pipavav port has already upgraded its present Jetty to birth VLGC. So it's not that we have to wait for VLGC to come until the new Jetty is constructed. VLGC have already started working at Pipavav port just a few months back. And just to add here, before all the 3 things, that is the KGPL pipeline, the VLGC Jetty and cryogenic, we have also constructed a very classic LPG rail gantry and you can see in the news, it's creating record every single month.

Probably we would be filling up the highest number of brakes from our LPG terminal -- from any LPG terminal in India from Pipavav close to 60, 70 rigs a month are being filled up and dispatched all the way to North of India, which is landlocked. So that's how Pipavav is turning into a very good LPG center, so to say, to import and distribute LPG in India.

[Unknown Analyst]

What is the utilization of our Pipavav operations like how much throughput would be doing on a static capacity in there...

[Murad Moledina, executive]

We do not give that terminal-wise throughput volumes, we give overall volumes, but it is doing very well.

[Unknown Analyst]

My next question is about distribution business. Sir, we also have a joint venture with Itochu, where we do sourcing for PSUs, we participate in tenders. But now that we also have a significant volume in distribution. So does the sourcing for this is done via a joint venture? Or is -- do we buy directly from the open market at the ports?

[Murad Moledina, executive]

Wherever we get it at a better price, we do that. So yes, but our joint venture partners do help us in procuring LPG for our distribution business also, But it's not restricted only to the JV partner. There are other players from whom we do procure if we get it at a better price.

[Unknown Analyst]

Okay. So the reason for asking this question was, so I want to understand how much of our sourcing volumes is for our own distribution setup versus what we do for other PSUs or participation for other PSUs?

[Murad Moledina, executive]

The sourcing volumes which we give are entirely for others, not for our own distribution business because this is supplied by our company in Singapore. So what we buy for our distribution is directly from vendors other than our JV company. So it could be anyone, anybody else.

[Unknown Analyst]

Okay. And my final question is, so we did a very big transaction a couple of -- a year back. And we were expecting to do some announcement in other liquids and other chemical handling capabilities. But so far, what we have heard is largely expansion into liquid and more expansion into LPG. And it's good to hear that we are doing cryogenic LPG now. But like what is the business plan on other businesses for which we had such a big cash pile? Can you talk a little bit more about it?

[Raj Chandaria, executive]

Yes, sure. We certainly are looking at and actually handling now increasingly different products, which are, for example, more sustainable. There is a very special deal that we have entered into in Pipavav, for example, for handling renewable fuels. We are -- so a number of different initiatives are underway. But if you're referring to the new energy projects or ammonia and things like that, we are still working on that. And definitely, at the moment, we actually have some concrete things to announce. We will be announcing that. But nothing concrete at the moment.

[Unknown Analyst]

Perfect. And if I'm allowed one more, it just came to my mind. So we have announced our expansion in JNPT where one of the peers is also setting up or planning to set up an LPG unit. And if we look at how Aegis has moved in the past, we first move into liquids and then we go into LPG. Can you talk a little bit about the competitive landscape at JNPT?

[Raj Chandaria, executive]

Sorry, what was the last -- what was your question? Can you comment about what?

[Unknown Analyst]

The competitive landscape at JNPT port.

[Raj Chandaria, executive]

Yes. No, we're not going to comment on other competitors' plans except that we -- right now, we are focused on our liquid project. And we always assess on a day-to-day basis, but no real comments on what somebody else is doing.

[Operator]

We have our next question from the line of Rajesh Agarwal from Moneyore.

[Rajesh Agarwal, analyst]

So there's been recent announcement by the government of India all the state elections, the subsidies in LPG will increase, and they will give subsidy for LPG for the cooking fuel. So will this help in our logistics?

[Raj Chandaria, executive]

Well, I mean, the more subsidies they give, obviously, hopefully, more LPG continues to be consumed because it's inexpensive, then we are happy because all the main national oil companies will be through putting more volume through our terminals. So the subsidy continues and so be it. That's great.

[Rajesh Agarwal, analyst]

Okay. And second question, sir, the expansion, which we are doing in -- all this LPG in cryogenic, can it -- the tanks can be used for other gases also?

[Raj Chandaria, executive]

Yes. I mean not simultaneously, obviously, once the tank is commissioned for gas, for LPG, you have to use it for LPG. But if you empty it out, it is possible to convert it to other users -- for other gases of a similar nature. For example, propylene or ammonia, both could go into these infrastructure into this type of interest.

[Rajesh Agarwal, analyst]

It can have a multipurpose use?

[Raj Chandaria, executive]

Yes, yes, but not simultaneously, obviously.

[Rajesh Agarwal, analyst]

And sir, last question, there pollution cracked on in Delhi or in Mumbai we are hearing about it. So will it affect the LPG gases or our terminals in JNPT or in Mumbai?

[Raj Chandaria, executive]

Well, on the contrary, we are -- that's one of the things we're very happy about that the more we can push on sustainability and pollution, the more there will be a move towards cleaner fuels like LPG, so we're actually very happy about that.

[Operator]

We have a next question from the line of Dr. Amit Vora from the Homeopathic Clinic.

[Amit Vora, analyst]

Yes. Sir, I see the gas margins better this time as compared to the last financial -- last quarter, Q2 '23. So any reason for that what do you -- why do you see that?

[Murad Moledina, executive]

We have always said that the margins would range between INR 3,500 to -- I mean INR 2,500 crores to INR 3,500 crores on a blended basis. And that's where it remains.

[Amit Vora, analyst]

Okay. The sales were less comparatively last year, but the margins are better, the EBITDA is better this year. So that's because of the throughput or the...

[Murad Moledina, executive]

Increase also.

[Amit Vora, analyst]

Yes. And any guidance for this financial year? As you said previously, so you may still maintain that 25% -- or 20% to 25% guidance as compared to last year.

[Murad Moledina, executive]

Yes, very much on the horizon. So fingers crossed, yes.

[Operator]

Ladies and gentlemen, due to time constraints, that will be the last question for today. I would now like to hand the conference over to Mr. Raj Chandaria for closing comments. Over to you, sir.

[Raj Chandaria, executive]

Thank you very much. So as I reiterated in my opening remarks, the company continues to execute really well on the program that we have laid out. As I mentioned, also quarter-to-quarter, we remain vigilant to continue performance. But we have our eyes firmly on the big picture, which is that Aegis is now one of the leading infrastructure entities for India's energy requirements for LPG and also on the liquid side.

And really we remain confident that this momentum that we have picked up is going to continue for at least the next 2, 3 years, as Murad has mentioned. So thank you very much for your continued interest in the company, and we'll speak again at the end of January. Thank you.

[Operator]

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

[Raj Chandaria, executive]

Thanks.