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Aegis Logistics Ltd
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Aegis Logistics Ltd
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Earnings Call Transcript

Earnings Call Transcript
2022-Q4

from 0
Operator

Ladies and gentlemen, good day, and welcome to the Q4 and 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 the date of this call. Actual results may differ materially. These statements are not the 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.

R
Raj Chandaria
executive

Thank you very much. So good afternoon, everyone. I am joined today by our Chief Financial Officer, Mr. Murad Moledina, and we will be presenting the FY '21/'22 full year results, which of course includes the Q4 results, as well as the outlook for FY '22/'23 and various other business updates.

Now you will recall that we did have a weaker start to the year in Q1, which was then followed by a steady recovery in the following 3 quarters, which has resulted in an overall good performance for the whole year of FY '21/'22. We are now looking forward to a strong performance for the current year, FY '22, '23 to go further on the recovery in profits growth that we saw in FY '21/'22.

So let me just turn to a little more detail on FY '21/'22. Revenue increased to INR 4,631 crores versus INR 2,833 crores from the previous year, primarily as a result of higher sourcing bonds. Our EBITDA for the group rose to INR 586 crores versus INR 535 crores in the previous year. That is rise of around 10% over the previous year and an increase of INR 164 crores in Q4, which is a quarterly lifetime high. Profit before tax rose to INR 472 crores as compared to INR 433 crores in the previous year, which was adjusted for the effect of the ESPP. That's a rise of 9% and a profit growth despite a very weak Q1 at the beginning of the year.

Profit after tax for the group was INR 385 crores versus INR 247 crores for the previous year and adjusted for the effect of ESPP, and that's a rise of 11%. We believe that this marks a clear return to our profit growth path despite a shaky peak-COVID effected start to the year in Q1, which was April, May, June of 2021. The earnings per share for the year therefore comes in at INR 10.19 per share for the whole of FY '21/'22 versus INR 6.36 per share in the previous year. On the basis of the improved results and confidence that business conditions have now stabilized, I'm pleased to report that the Board has declared a final dividend of INR 0.50 per share, aggregating to INR 2.50 per share for the whole year, a 25% rise over the previous year.

So I'd now like to go through the underlying segment numbers. In the Liquids division, the revenue for FY '22 were INR 270 crores versus INR 234 crores in the previous year. That's an increase of around 15% from the previous year. And the EBITDA for the year rose to INR 194 crores, which is again an increase of 13% from the previous year, reflecting the impact of the capacity additions at Kandla, Mangalore and Haldia.

Coming to the Gas Terminal segment. Revenues were INR 4,361 crores versus INR 3,609 crores in the previous year. The EBITDA for the year was INR 390 crores versus INR 362 crores in the previous year, a rise of 8% over the previous year. We continue to see a rebound for the Gas division with sourcing and distribution volumes improving and throughput remaining stable, as I will now explain with the sales volume analysis.

Starting with the throughput volumes. The LPG volumes for the year handled at our 3 terminals of Mumbai, Haldia and Pipavav were 2.86 million metric tons versus 2.91 million metric tons in the previous year despite a very low first quarter. So Q4 volumes were 800,800 metric tons versus 752,000 metric tons of the previous quarter with Q4 probably the second highest lifetime volumes. Haldia had good volume, and Mumbai continue to operate at full capacity with all 3 oil companies: IOC, HPCL and BPCL, bringing imports.

In LPG rail gantry at Pipavav continue to perform well and is delivering considerable cost savings to our customers, which is in turn driving improved volumes at Pipavav. The Bulk Industrial segment delivered 38,580 metric tons in Q4 versus 29,662 metric tons in the previous quarter, and aggregating to 114,058 metric tons during the year versus 56,107 metric tons a year earlier, representing a 50% growth over the previous year and margins remained stable.

The commercial and domestic cylinder selling segment, which serves the hotels, restaurants and small-scale industries under the Aegis Puregas brand and to the domestic household segment, under the Aegis Chhota Cikander brand was steady with Q4 sales of 6,568 metric tons versus 6,414 metric tons in the previous quarter. And for the year as a whole, sales volume ended at 24,334 metric tons versus 19,524 metric tons a year earlier, registering a 25% increase.

We now commissioned 5 new booking plans during the year, which should bring additional volumes to this segment in the current year. Autogas sales were slightly higher at 6,185 metric tons in Q4 versus 5,961 metric tons in Q3, and 21,700 metric tons during the whole year versus 19,785 metric tons a year earlier, which represents an increase of around 10%. Margins remain stable and healthy. 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 270,451 metric tons versus 125,858 metric tons in the previous quarter. As we reported last quarter, we expect this to -- increase in volumes to continue throughout the calendar year on account of winning an important tender at the beginning of the year.

Let me now finally turn to the business highlights for the quarter and the outlook for the rest of the year and an update on the CapEx plan. As far as the -- during the quarter, Pipavav Port continued its work on making the LPG jetty compliant for handling VLGC with completion expected by June 2022, which when completed, will further improve the competitiveness of Pipavav as an LPG logistics hub. You recall that an important part of this work, the rail gantry, which is completed. And now we are waiting for the jetty to be completed. Kandla Oil Jetty #7, which will be VLGC compliant. The work continues and is expected to be completed by September 2022. The work by the [ IHEL, which is the Hindustan Petroleum, Bharat Petroleum ] consortium [indiscernible] KGPL pipeline -- LPG pipeline, that the Kandla-Gorakhpur LPG Pipeline, which, if I can remind everyone, both Kandla and Pipavav terminals will be connected. That work continues. Phase 1 is expected -- according to the information we have, is expected to be completed by December 2022.

The outlook for FY '23. Both gas and liquids segments continue to perform well. We've had a good start to the year and is our expectation that this next year, the current financial year '22/'23 sales will continue to grow robustly.

As far as the projects are concerned, I'm really pleased to confirm that the Kandla LPG project has been successfully commissioned with no technical issues. And we have, in fact, handled our first cargo for the May. We expect now to see the terminal gradually ramp-up volumes, which are contributing to the earnings per share. Concrete work has now commenced full swing on the expansion project that we announced in Q2, and we will keep giving updates in the ensuing quarters on how these are progressing. As far as the Aegis Vopak joint venture is concerned, I'm also really pleased to confirm that all formalities are now complete. The joint venture has been completed successfully, and we look forward to excellent results from this joint venture.

That concludes my presentation. We can now take questions. Thank you.

Operator

[Operator Instructions] Our first question comes from the line of Digant Haria with GreenEdge Wealth Services.

D
Digant Haria
analyst

Firstly, congratulations for the probably the best ever quarter in terms of gas volumes, both in retail and institution. So my question, sir, is how much of the gap that we handle is eventually used for cooking gas purposes only? Would you have insight as to what [ BCCL, IOC, HPCL ], what percentage eventually enters cooking gas in houses of people?

R
Raj Chandaria
executive

I would say that the statistics that we have basically show that 90% of the LPG volumes in India are related to cooking gas. And this is -- so that will mean 10% is noncooking gas related. I think the ratio in the future will change. Cooking gas will continue to grow, thinking by way of the fact that more and more people are coming into the LPG net. But the noncooking gas applications are also increasing. Transportation, slow, but steady improvement. The industrial applications of LPG are also increasing. And is right now, it's a good competitor to natural gas because, as you know, natural gas prices are rising quite rapidly. Plus, I think generally, we are seeing much more awareness of the environmental pressures and so on. And slow substitution to cleaner fuel, those are happening amongst industrial customers. So I think at the moment, the ratio is, I would say, 90%, but slowly, we expect the proportion of noncooking gas applications to also improve.

Operator

Our next question comes from the line of Himanshu Yadav with Edelweiss Wealth.

H
Himanshu Yadav
analyst

Well, first of all, could you please clarify the visit behind spike in receivables and that INR 221 crores dividend paid, what is that related to the cash flow statement? That's one. Second is, I mean, with Kandla now started, what kind of volume expectations do you have for the first 12 months? I mean, you have been saying that anywhere from 0.7 million to 1 million tonnes is what we have been expecting. Does that remain the same? Or is there any change in that? That will be all.

R
Raj Chandaria
executive

Could you repeat the first? I didn't hear the first question.

H
Himanshu Yadav
analyst

So first question was the reason behind there is a spike in the receivables in the balance sheet. And also, there is a INR 221 crore dividend paid item appearing in the cash flow. So I just wanted a clarification regarding what is that related to?

R
Raj Chandaria
executive

Okay. Yes. Murad, can I ask you to take that question, please? The first part, and then you can talk about Kandla.

M
Murad Moledina
executive

Yes. So as you are aware, our beginning this calendar year, we have had a good booking of sourcing business. And therefore, as these have almost doubled than the previous quarter, you will see the increase in receivables as well as corresponding increase in payables. So these are on back to back open credit of 30 days.

So they will both appear, but they are not a drag on working capital because working capital is 0 in this. So it is only on both the sides, equal kind of increase you will see in receivables as well as payables on account of increase in sourcing volumes during this calendar year 2022.

As far as dividend and cash flow is concerned, in this financial year, we have paid 2 dividends of INR 2 each. So that is what is being reflected out there, including minority shareholder of Hindustan Aegis being paid [indiscernible] share from our subsidiary, Hindustan Aegis. So all of these 3 together will amount to INR 221 crore dividend, which has been shown here.

So we paid a dividend for FY 2021 during the year, as well as we paid for the year '21/'22, an interim of INR 2. So INR 4 itself, that is INR 140 crores paid to Aegis' shareholders and the balance is what the minority shareholders was paid out of Hindustan Aegis, our subsidiary. I hope that answers.

R
Raj Chandaria
executive

Yes. As far as the second question is concerned, the prospects for the Kandla LPG terminal, I think, obviously, we're 6 months delayed. So obviously, that has sort of reduced our expectations to that extent. But we expect a slow and steady ramp-up to the volumes, in LPG terminal or any form of gas terminal, it really depends, of course, on the contracts that we can and the attractiveness of the terminal.

We have been speaking to our customers that we are now ready to receive cargoes. And I'm confident that while we may not have specific exact numbers at the moment to share with you, but I'm confident that we will, like all the other 3 terminals we will achieve close to the kind of numbers that we have been talking about in terms of throughput.

So Murad, do you want to add anything to that?

M
Murad Moledina
executive

Yes. And also please note that Kandla terminal is very close to a very large industrial consumption market for LPG. And that is also what we would be targeting. So you will have to see both put together the throughput as well as the distribution margins, which Kandla is going to generate. I think that will definitely meet up with whatever projections we have had in mind.

Operator

Our next question comes from the line of Priyankar Biswas with Nomura.

P
Priyankar Biswas
analyst

Sir, what I heard about Kandla is that this asset can also give you distribution-linked benefits? That's what you said in the previous statement. So can you like quantify the impact that, like how much uptick in distribution volumes you can expect just because of the Kandla [ commission ] from your normal run rate?

R
Raj Chandaria
executive

Murad, do you want to just take that question?

M
Murad Moledina
executive

I can take that. So let me explain you in the sense that as you are aware, distribution margins are at least between 5x to 10x of throughput margins. And as such, even if we are able to do 10,000 tonnes distribution from Kandla, which is expected very easily and Morbi market is very nearby, we would be doing equivalent of 50,000 tonnes of throughput in that sense. So that should give you a fair idea of the potential. And it all depends as we will grow and there is a huge potential, we believe, that we can grow in distribution volumes out there. So we are looking at both throughput as well as distribution to achieve what is targeted as an EBITDA generation from Kandla LPG terminal.

P
Priyankar Biswas
analyst

Sir, my additional question is recently, you have acquired this asset at Kandla, this Friends liquids terminals. So the acquisition price seems quite low. I mean, given the size of the asset. So are there any hidden issues or something with these assets that we need to rectify. I mean is there some problem with that asset?

R
Raj Chandaria
executive

No. I think what you've correctly identified, we are very proud of what has been achieved in terms of the acquisition price. I think it's an outstanding transaction for us. I'm surprised that nobody else really noticed it. But you did, congratulations.

No, I can confirm that [ Thara ], due diligence was done. There is absolutely nothing wrong with the assets. I think, in fact, the asset is excellent asset and really puts us in a commanding position as far as the liquid business in the north part of India, for which Kandla is the main gateway. We are now the undisputed, jointly with Vopak, of course, in AVTL, where we have 51%, the undisputed market leader, the price setter and really looking forward to some outstanding numbers coming out of this acquisition. So I can confirm that no, there is nothing wrong with the asset. It's in excellent condition. So Murad, do you want to just...

P
Priyankar Biswas
analyst

So it was such a great asset, I mean, by the previous owners. So I'm just wondering.

R
Raj Chandaria
executive

Murad, do you want to add anything, please?

M
Murad Moledina
executive

Yes, yes, yes, let me add here. You see the advantage with Aegis is that it had money to put on the table. And it was the only party because we had already announced our joint venture with Vopak, really a serious contender to take over easily that asset and quickly. And of course, on the other side, there were succession issues, there were pressures which the party was undergoing. And sometimes things just fall in place. So we feel very happy that this has happened. There are -- there could be a number of reasons. We can't list all of them. But I think we have highlighted a few that we were the party who could put money on the table, acquire the asset quickly. And we could undertake due diligence fast to complete it in a very short time. And I think this is what put us ahead of any other contender on paper that would have been there. So we are very happy that we could do this.

P
Priyankar Biswas
analyst

Sir, one additional question. So since the deal with Vopak is now affirmed that is concluded, so can you give us an idea, since this is done, so what would be the cash utilization? So you are getting like INR 2,200 crores of cash post tax. So how this is going to be utilized probably a road map or something like that.

R
Raj Chandaria
executive

Yes. Murad, do you want to just take that?

M
Murad Moledina
executive

Yes, I'll start with that. So we have in the past said that we have done this joint venture and this cash. We have highlighted and set out 3 growth parts which we are going to pursue. And we are sure and confident that the cash would easily be used in these 3 growth parts. Of course, the first one being that we have said that there will be more aggressive growth and expansion in our retail and distribution segment, which is a high EBITDA generating segment. And then, of course, in AVTL itself, there is already a set growth path where we wouldn't -- we would be deploying all the internal accruals of back into the growth projects that we have identified over the next 5 years.

And then there will be a third growth part, which is new products, the JV and the JV partner brings on the cable, lots of new ideas and projects and products, which could be pursued, of course, in terminal space whether it is natural gas, ammonia and many, many more. And we are already talking on some of them. And I'm sure in near future will come up with projects as and when they are identified as suitable investment opportunities and share it.

We have, of course, already announced INR 1,250 crores of project in AVTL, which has already kicked off and has commenced construction. So on all fronts, I think very aggressive growth pursued. And we are sure this cash would be used productively. In the meantime, of course, we would ensure that it gets a reasonable safe return in our books till the time it is deployed.

Operator

[Operator Instructions] Our next question comes from the line of Digant Haria with GreenEdge Wealth Services.

D
Digant Haria
analyst

Sir, my second question is -- my first question was cut. I don't know why. But my second question was that we mentioned in our presentation that we'll do around INR 1,250 crores of CapEx in the joint venture with Vopak. And that would be for 1 lakh, 90,000 tons of liquid capacity and around 1 lakh metric tons of gas capacity.

Now before the deal, we almost had 6x of that capacity in liquid and around 9x of that capacity in gas. So is it fair to say that the replacement value of all the assets that we had before the Vopak deal would easily have been INR 6,000 crores, INR 7,000 crores? Or has the CapEx cost really gone up in recent years?

R
Raj Chandaria
executive

Murad, I think just what's your -- what's the cusp of the question? Is it on the replacement cost of the assets? Or -- what is the question?

D
Digant Haria
analyst

My question is, sir, that the assets that we already have are maybe 5x or 6x the assets we are trying to build in the Vopak joint venture by spending INR 1,250 crores. So like is it that the replacement value of our assets has gone up so much in the last 5, 10 years?

M
Murad Moledina
executive

Let me put it this way, that our existing LPG starting capacity is close to around 110,000 metric tons, all 4 terminals put together. 18,300 Pipavav, 25,000 Haldia, 20,000 Mumbai and 48,000 in Kandla. Yes. So that is 110,000 metric tons. We are building 100,000 additional static gas capacity.

D
Digant Haria
analyst

I get it. Okay. Okay.

M
Murad Moledina
executive

Yes. So your valuation of INR 6,000 crores, INR 7,000 crore, I don't know where it comes from.

R
Raj Chandaria
executive

But I just would like to add that, I mean, a general point that, in fact, the -- for any new comer coming into this sector, yes, the capital expenditures has gone up, materials are much more expensive. So somebody who has already got a substantial asset base obviously is always going to be at an advantage.

D
Digant Haria
analyst

Right, right, right. So just we have to do a theoretical exercise of what will be the -- if we are to make the entire Aegis Logistics asset base today, what would probably -- what would be the probable cost of that?

M
Murad Moledina
executive

Sorry, we've not worked out. So it's very difficult. Maybe hypothetically, and in any case. But it's not just the cost, the locations where in Mumbai, no one else can come in, there's no land. In Pipavav, no one else can come in, there's no land. So it's not just the cost, it's very difficult to value anything like this, hypothetically.

Operator

Our next question comes from the line of Depesh Kashyap with Equirus Securities.

D
Depesh Kashyap
analyst

Sir, volumes for sourcing, throughput and distribution have improved quarter-on-quarter, but your EBITDA in the gas segment seems to be a little down, right? So I just want to understand the reason for the same, which with segment, have you felt the margin pressure?

R
Raj Chandaria
executive

Murad?

M
Murad Moledina
executive

We have in Q4 almost dropped identical EBITDA as the previous quarter. And it is the mix. But yes, in the last quarter, the retail margins were a little higher. But the throughput volumes, which increased in the current quarter was not very significant as well as the Bulk Industrial sales where the real increase was there at the [ least ] margin out of all the 4 subsegments. So which is why you see almost equivalent kind of an EBITDA in Q4 versus Q3. .

D
Depesh Kashyap
analyst

But will you say that the throughput margin...

R
Raj Chandaria
executive

I think it was more of the product mix because as Murad said, that the Industrial segment accounted for a fairly important part of the Q4 numbers. And there, the margins are the lowest out of all the segments that we have. Yes, sorry, go ahead.

D
Depesh Kashyap
analyst

So I just want to confirm, so the throughput margins are intact, right? The INR 1,000 per tonne that you basically normally talk about, that is...

M
Murad Moledina
executive

Yes, absolutely.

R
Raj Chandaria
executive

Yes, yes. Absolutely.

D
Depesh Kashyap
analyst

Okay, got it. And sir, recently, there were a lot of press releases that you put on the stock exchanges regarding the change in valuation, right, of the few terminals that were transferred to a JV. I just want to understand what was the reason for the change in valuation for that?

M
Murad Moledina
executive

Sorry, I have not understood your question correctly.

D
Depesh Kashyap
analyst

There were a lot of press releases that the assets which are being transferred to the AVTL joint venture, there was some change in valuation, right, if I understand correctly.

M
Murad Moledina
executive

Okay. Yes. Now that valuation happened when we were finalizing the joint venture, and it was an upside valuation -- so we were -- as you can see with Vopak release also, we could secure EUR 10 million more than what was earlier agreed, which is around INR 900 million is what is the valuation finally signed off between the partners, so we could secure more. We are happy for that.

D
Depesh Kashyap
analyst

Okay. Got it. So sir, now the JV is now structured, right, post March. So can you just give the gross rate on the cash number of AVTL as of now? What will be that?

M
Murad Moledina
executive

No, it's just happened, just 2 days back. So just give a sign, maybe in Q1 when we come out, we will come out with some advice on that.

D
Depesh Kashyap
analyst

Got it. So INR 255 crores for the Friends terminal that was spent through JV. Is that understanding correct?

R
Raj Chandaria
executive

Yes, yes, absolutely. Yes, yes, yes.

D
Depesh Kashyap
analyst

And lastly, sir, the CapEx of INR 1,250 crores that you have mentioned in the PBT, how should we build CapEx for FY '23 and '24?

R
Raj Chandaria
executive

I think you can spread it almost equally between 2 years, FY '23 and FY '24. .

D
Depesh Kashyap
analyst

So INR 1,250 by 2, right? That is the CapEx you're looking at every...

R
Raj Chandaria
executive

You can safely we do that, yes.

Operator

Our next question comes from the line of Sarvesh Gupta with Maximal Capital.

S
Sarvesh Gupta
analyst

So with regard to this INR 2,200 crores that you are receiving. So INR 1,250 crore is the expenditure by the joint venture, right? So out of which our share would be INR 625-odd crores. Is that the right way of looking at it?

M
Murad Moledina
executive

Yes.

S
Sarvesh Gupta
analyst

Okay. So given that this will be again spread across 2 years. So out of the INR 2,200 crore, we have plans for INR 300 crores as of now for this year. What is the plan for the remaining INR 1,900 crores for FY '23 and for the remaining INR 1,600 crores for FY '24? If you can be more specific because I know that you have tried to answer this earlier to an earlier participant's question, but that was very, very high level and very vague. So I want to understand specifically what is the quantum of money that we are going to spend, which year, which way? Because the businesses which have been retained are very assets-light, like your distribution and all. So they don't require that quantum of money. So as shareholders, because this has been almost 1 year the deal has been in making, so we want some concrete answers on this particular question, sir?

M
Murad Moledina
executive

Yes. Well, we take your point, but then the deal has closed just 2 days back. And we are yet to decide on the projects which are going to be undertaken. And we will come out as and when we are ready with those projects because a project involves a lot of things to be closed and fixed. So we are not yet ready for that.

But what we can tell you is that there are lots and lots of opportunities, and we are working on many of them, and sooner -- as and when they happen, and we are ready to undertake, we will come out and announce then like we have announced to INR 1,250 crores of projects.

So we -- is that we cannot wait and first finalize the project and then come up with the money. So the joint venture was important for 2 reasons. One is that it gave the cash for future growth as well as it gives new, it brings on table new ideas like industrial terminals, jetty et as well as new products like natural gas and ammonia, et cetera, which we can now get into and which are already on the table under discussion. But have patience, we'll come up with -- as and when we're ready the specific projects, we'll announce.

R
Raj Chandaria
executive

Yes. I think I'd like to add a point here, that one of the philosophies that Aegis has is that we will not invest in projects which are -- do not give shareholders an excellent return on capital. This has been the guiding philosophy better not to spend the money than do poor-return projects. So we will be looking around for high-return projects.

I think Mr. Biswas from Nomura also highlighted that we will try to acquire assets or build assets, which are attractively priced, which will, of course, enhance our return on capital employed. And we will not do white elephant projects or prestige project. Basically, as and when opportunities come before us, we will examine them and then deploy the capital that we have in order to give the maximum return. So that's our philosophy.

And as Murad said, that -- as and when these opportunities present themselves, we will, of course, be keeping everybody updated.

M
Murad Moledina
executive

Yes. And just to add here, in addition to INR 1,250 crores projects, which were announced, we acquired when the opportunities -- when the opportunity presented itself. The Kandla Friends terminal of 0.5 million kiloliters.

So there are discussions on many other such opportunities. And as and when we are able to secure them or finalize, then we would come up with the announcements.

S
Sarvesh Gupta
analyst

Understood. From a business point of view, are there -- I mean, most of this Gas and Liquid division business has been parked in the JV now. You have distribution business with you. Are there any adjacent areas where we feel we will have a competitive edge and where a reasonable amount of money can be deployed? I mean, adjacencies to your business, do you see such possibilities? And if yes, then what are those?

R
Raj Chandaria
executive

Yes. I would say every aspect of the business, of our adjacent businesses, which improves and enhances the competitiveness of our existing assets. So Murad mentioned, for example, if we have the opportunity to participate in or build jetties which bring down the cost of bringing gas or new energy projects or anything like that, we will definitely look at. And that's something that our teams are doing every day.

I think somebody mentioned or I mentioned that the environmental pressures are increasing on people using dirty fuels. And one of the key things that we, at Aegis, believe is that we will be an important player participant in helping India transition to a more sustainable future. So that means primarily gas in the short term. So all aspects of -- to converting, for example, people who are using coal to cleaner fuels and so on. All aspects of that will be on the table, and our teams are actively looking at such projects and investment opportunities.

S
Sarvesh Gupta
analyst

Understood, sir. And this Friends terminal that you have acquired, while normally, you will have some time to ramp up the capacity, this would already be in full utilization. So what sort of an EBITDA would it add to us?

R
Raj Chandaria
executive

Yes. This is one of the advantages of acquisition-driven growth as well. Murad, can I hand over that question to you?

M
Murad Moledina
executive

Yes. So what we do is that when we acquire a terminal, it has to be then upgraded to the standard of Aegis and Vopak. So that doesn't mean that we will close down. But it will take time for a ramp-up and change of product mix, which will enhance the revenue and EBITDA. So it's premature to come up with any projections of EBITDA as far as Friends terminal is concerned. But during the year, I'm sure we would be in a position to come up with the contributions, which Friends terminal would make to our EBITDA very soon.

Operator

Our next question comes from the line of Chirag with Budhrani Group.

U
Unknown Analyst

So wanted to understand this --. Am I audible?

R
Raj Chandaria
executive

Yes, your voice is a bit muffled.

U
Unknown Analyst

Am I audible now, sir?

R
Raj Chandaria
executive

Yes. You're audible.

U
Unknown Analyst

Sir, just 2 things to understand, the CRL acquisition and the acquisition from Friends and this liquid terminal. What is the current utilization level there, sir?

M
Murad Moledina
executive

In both the cases, it is above 75%.

U
Unknown Analyst

75%. And this acquisition from Friends Group will come in Aegis book, right, all 100% belongs to Aegis?

M
Murad Moledina
executive

AVTL, Aegis Vopak Terminals. All liquid capacities are in Aegis Vopak.

U
Unknown Analyst

Okay. And also, I wanted to understand, during FY '20, we had very good sourcing volume of around 18 lakh, 19 lakh metric tons. Are we only -- are we ever going to reach there? Or do you think that the current volumes are good enough?

R
Raj Chandaria
executive

Yes. Sourcing volumes, I think, yes, we had an excellent in the '18, '19, '20 year, then, of course, we've had much lower volumes. We are back in the game now for this calendar year, and we expect to see continued growth in sourcing volumes. I can't predict the exact whether we will win a tender or not. It is a tender-driven business. And of course, there are some supply chain challenges as well. But our objective is to obviously try and get back to the kind of levels that we were operating previously.

Operator

[Operator Instructions] Our next question comes from the line of Suman Kawatra with Techfin Consultants. Ms. Kawatra, your line is unmuted. Please go ahead.

Since there is no response, we will take the next question. Our next question comes from the line of Anand Mundra with Mytemple Capital Advisors LLP.

A
Anand Mundra
analyst

I'm sorry, I joined this call late, so probably this might have been answered earlier. What is the reason for an increase in borrowing year-on-year? It's gone up from around INR 400 crores to around INR 800 crores. So just wanted to know that.

M
Murad Moledina
executive

Sorry, what did you say the borrowings have grown from?

A
Anand Mundra
analyst

Around INR 400 crores to INR 800 crores, the borrowing?

M
Murad Moledina
executive

Where did you get INR 800 crores from?

A
Anand Mundra
analyst

Okay. I have made some...

M
Murad Moledina
executive

It's not INR 800 crores.

A
Anand Mundra
analyst

So what is the debt level?

M
Murad Moledina
executive

[indiscernible] INR 300-odd crores, INR 1,090-odd crores for the current year, if you look, yes.

A
Anand Mundra
analyst

All right. I'll recheck that figure again. I'm sorry for that.

M
Murad Moledina
executive

INR 800 crores we have never ever in our lifetime taken.

A
Anand Mundra
analyst

Okay, okay. And sir, regarding our -- I mean, how much of our distribution is to retail, domestic retail, around what percentage?

M
Murad Moledina
executive

Again, what volume are you referring as a percentage?

A
Anand Mundra
analyst

Distribution, distribution volume. Gas distribution volume.

M
Murad Moledina
executive

Yes. So gas distribution volume, if you look at our presentation, 24,000 and 21,000 were Autogas and packed cylinders and around 114,000 was industrial consumption, industrial -- Bulk Industrial Distribution. So that's the breakup for the year. 1,14,000, 22,000-odd Auto LPG and around 24,000-odd is packed cylinders.

A
Anand Mundra
analyst

Okay. So on the retail side, are we seeing any pressure on volumes given that government has increased subsidy through the PSU channel? So would people be more inclined on getting cylinders through oil PSUs?

M
Murad Moledina
executive

No, no. We have -- I think we are not into domestic LPG segment in a big way as yet. So there is enough scope in commercial LPG where -- and of course, very small cylinders of 2 kg and 4 kg in retail segment. For commercial use, we have gone all the way up to 450 kg cylinder. So there is enough scope there to make inroads. And please understand there is no change in pricing. The subsidy is given to the oil companies. So there is no tweaking in the price, which the consumer pays as such.

Operator

Mr. Mundra, sorry for the interruption. I would request you to kindly join the queue.

Our next question comes from the line of Rajesh Agarwal with Moneyore.

R
Rajesh Agarwal
analyst

Sir, I have 2 questions. One, Auto LPG, can there be a drop in volumes because our main customers are auto rickshaw icier drivers and all 3-wheelers, and the government has not increased the subsidy. There's a lot of black marketing happening in that sector where the difference is a huge percent per kg or whatever you call it. And second question, sir, PNG infrastructure is being set up across country. Will it affect the coking LPG volumes, which we are importing? These are the 2 questions, sir.

R
Raj Chandaria
executive

Yes. Murad, do you want -- shall I take those?

M
Murad Moledina
executive

Sir, let me just add here. I'll just highlight a couple of things here, then you can take it. As far as PNG is concerned, and maybe you're talking about CGD. There are so many players now getting in, but where is the material. Although the CGDs, which have been given, the city distribution gas network, maybe equal to around 20 MMBtu, if I may call it. And our local production is not even 25%. And if we try and import natural gas, it's ridiculous rates at which it is now being sold. The producers have booked till 2, 3 years from now, till 2026 and beyond. So where is the gas for the city distribution and cooking purpose. So that's what and -- although LPG volumes have not dropped, in fact, they are marginally increased during the year, as you can see from our presentation. For the year, over the previous year, we have increased by 25%.

But there are a lot of Autogas station in pipeline. So they wouldn't be in pipeline if there wouldn't be a demand for the gas. So there are franchisees who are interested in setting up stations and they are in pipeline, and you will see ramp up. The only thing is it is a slow effort because of a lot of permits and on-ground difficulties, which the franchise face. So otherwise, we don't see a challenge.

Yes, Mr. Raj, if you want to add to this one?

R
Raj Chandaria
executive

Yes, yes. I fully endorse what you said, Murad, and I'll just add that the question about the penetration of natural gas distributed through a pipe network and so on has been raised many times before. I think, first of all, city gas distribution is coming and -- but we do not believe it will pose a serious challenge to the growth in LPG.

LPG will continue to be the most important fuel in India. And as the big important pipelines like the KGPL pipeline and so on get built, cooking gas will -- in the most portable form, which is LPG will be the dominant fuel in India for many, many years to come. And there is a serious question on the economics of pipe natural gas in terms of the sourcing of the actual natural gas, as Murad alluded to.

So we believe that natural -- LPG will continue to be the main fuel of the future. On the second question of the price differentials for the Autogas segment and so on. I don't -- we don't anticipate serious problem on that. We've been through this type of cycle for many years. And ultimately, prices always adjust, and we don't anticipate a problem in volumes.

Operator

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

R
Raj Chandaria
executive

Thank you very much. So I just want to conclude by saying that really, 2021/'22 has been a -- started off in a very challenging way. And -- but we finished the year on a note of optimism and tremendous excitement because we have concluded many, many important milestones, including commissioning of our Kandla terminal, including the completion of the Vopak joint venture and the infrastructural developments that are going on in the various ports. And we begin the new financial year with real confidence in the past that we are following.

So -- and really looking forward now that these important projects are behind us, Kandla and Vopak and so on, really looking forward to the next phase of growth and reporting some excellent results going forward. Thank you so much, and we will see you next time. Bye-bye.

Operator

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

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