Aegis Logistics Ltd Management Discussions

Introduction

Since its inception in 1956, Aegis Logistics Limited (also referred to as ‘Aegis, ‘Aegis Logistics or ‘The Company) has continually transformed itself to reflect the changing circumstances in the environment in which it operates. This period is no different. The world is undergoing a sustainability challenge that is manifesting itself in a variety of forms, no less than in the form of climate change. India, which has now surpassed China as the worlds most populous country, can no longer be immune to such challenges and, in fact, has made international commitments to reduce its carbon emissions to net zero by 2070. This presents a uniquely challenging opportunity.

Aegis Logistics and its subsidiaries (together referred to as ‘the Group or ‘Aegis Group) is playing an active role in this metamorphosis. In this context, we commit ourselves to supporting Indias transition to a more sustainable future. We store and distribute liquids and gases across India in a safe and sustainable manner with a dedicated focus on environmental impact.

In addition, we have conceptualised Project GATI (Gateway Access to India) to capitalise on emerging market opportunities and to strategically invest in storage solutions and infrastructure necessary to address the markets evolving demands. Our strategy remains unchanged-building a network of terminals along the coastline of India and distribution facilities so that we may deliver on our mission.

FY 2024-25 Highlights

Listing of Material Subsidiary

One of the Companys material subsidiaries, i.e, Aegis Vopak Terminals Limited (AVTL), has successfully achieved the milestone of listing on BSE Limited and National Stock Exchange of India Limited effective from June 02, 2025.

Terminalling

Our joint venture with Royal Vopak, Aegis Vopak Terminals Ltd. (AVTL) continues to go from strength to strength. We have no doubt that the combined reputation and quality of Aegis and Vopak together impact the third- party logistics industry structure in the form of industry consolidation. An example is the various acquisitions and additions over the decades, making Aegis the most prominent tank terminal service provider in several of the major ports of India. During the year, we commissioned two new liquid terminals at Mangalore with an aggregate capacity of 75,230 m³ and one at Jawaharlal Nehru Port Authority (JNPA) with a capacity of 1,01,900 m³. The gas terminalling business continues to grow as a result of increasing LPG demand in the country and the addition of storage capacity at new and existing port locations.

Integrated LPG Supply Chain Well Positioned to Serve Sustainable Energy Demands

Aegis is a fully integrated participant in the Indian LPG market, comprised of four main segments: domestic cooking gas, industrial, commercial, and transportation. While LPG is not a renewable energy source, it is a much cleaner fuel than biomass, coal, or kerosene.

Its portability and convenience make it an ideal fuel to help India transition to a more sustainable energy future. In addition to demand from the domestic segment, the industrial use of LPG substituting dirty fuels has been boosted with the commissioning of the AVTL Kandla LPG terminal. The continuing rise in our distribution volumes reflected this, including those distributed in industrial-scale cylinders, such as our Magna solution. Throughput volumes of LPG have also increased substantially to 4.5 MMT (million metric tonnes) in FY 2024-25 from 3.3 MMT over the past two financial years.

Aegis LPG cylinders

FY 2024-25 Robust Profit Growth

With the rapid increase in LPG distribution volumes and liquid tankage capacity, the operational profit of the Group increased to Rs. 1,120.21 crore compared to Rs. 993.62 crore in the previous year. Furthermore, the EBITDA split between LPG and Liquids is reflected below:

Liquid Logistics Division

Liquid terminalling revenues were at Rs. 649.77 crore as compared to Rs. 549.37 crore the previous year, an increase of about 18.28%, and EBITDA of the division was higher at Rs. 498.33 crore compared to Rs. 395.80 crore in the previous year, primarily due to better capacity utilisation at Mangalore, Kandla, Mumbai, Kochi, and Haldia. Future growth in this division will come from the additional capacities at Mangalore and the newly commissioned facility at JNPA and better mix of products handled at Haldia, Kandla, Mangalore, and Kochi, besides future capacity additions at those ports. The Mumbai terminals continue to function at full capacity.

Gas Division

Aegis Group captures the complete logistics value chain from sourcing and terminalling to the distribution of LPG. In FY 2024-25, the division recorded revenues of Rs. 6,114.03 crore as compared to Rs. 6,496.56 crore the previous year, primarily due to a decrease in sourcing volumes, though the LPG logistics continued to witness an increase in the quantum of throughput handled.

The EBITDA for the Gas division increased to Rs. 667.45 crore as compared to Rs. 612.10 crore in the previous year, mainly due to higher terminalling volumes. Distribution of LPG and Propane through all channels in packed cylinders and bulk continues to be a focus area. This steady growth signals an increasing demand for LPG, and our integrated logistics services make Aegis Group uniquely positioned to both capture market share and achieve our vision of a more sustainable future.

New Developments

At Mumbai port, the Company has been allocated additional plots admeasuring an aggregate of ~19,000 m² and it is in the process of construction of Liquid Tank Terminals for further expansion of Liquid storage capacity. Once complete, these tanks will cater to additional liquid storage requirements of customers and also ease the load on the existing liquid storage facilities at Mumbai, which are fully utilised.

At JNPT in Navi Mumbai, the Group has completed the construction of and commissioned a greenfield liquid terminal with a storage capacity of 1,01,900 m³. Additionally, the Group has been allocated an additional ~30 acres of land and is in the process of development of tank storage terminals for Liquid, Liquefied Petroleum and Ammonia Terminal.

New liquids terminal at JNPT

At Pipavav, the Company is constructing cryogenic tanks with a total LPG storage capacity of 48,000 metric tonnes, which is expected to be commissioned by July 2025. Also, the Company has started development on an independent Ammonia storage terminal with a capacity of 36,000 MT.

At Mangalore, the Group has commissioned an LPG cryogenic facility with a static storage capacity of 82,000 MT the Mangalore terminal on June 12, 2025. The Group has also commissioned a 75,230 m³ Liquid storage terminal in March 2025, comprising 19 tanks.

For further development at Mangalore, the Group has been allocated land at New Mangalore Port of 8,140 m² plot for the construction of tank farms/storage infrastructure. In addition, the Group has also been allotted an additional plot measuring 60,703 m² for setting up storage infrastructure and facilities.

At Kandla, the Group has been allotted a plot admeasuring 27,458 m² for constructing storage tanks, which would further strengthen the Companys presence at the location once operational.

Summary

With its strong market position due to capacity expansion, an improved product mix, and higher storage volumes in the Gas and Liquid Divisions, the Group is well-positioned for continued growth in FY 2025-26.

The significant changes in the financial ratios of the Company, which are more than 25% as compared to the previous year on a consolidated basis, are summarised as follows:

Ratio	Consolidated		Change	Reason for change
	FY 2024-25	FY 2023-24	(%)
Return on Net Worth (%)	15.56%	15.33%	2%	The Return on Net Worth ratio increased by 8%, primarily due to higher profits for the year driven by the new liquid terminal capacities as well as an increase in LPG volumes handled compared to the previous year. This improvement was partially offset by a 6% reduction in the ratio, attributable to an increase in net worth resulting from a rise in securities premium following the issuance of equity shares.
Debt to Equity Ratio	0.41	0.32	28%	Increase in debt to equity ratios is due to increase in borrowings. However, on consolidation net debt to equity ratio is negative.
Net debt to Equity Ratio	(0.05)	(0.07)	(29%)	Negative net debt to equity ratios is due to proceeds received from sale of investments in subsidiary company and issue of equity shares by subsidiary company.

Internal Control Systems and Adequacy

The Company has a proper and adequate system of internal controls to ensure that all the assets are safeguarded, protected against loss from unauthorised use or disposition and that transactions are authorised, recorded, and reported correctly. The Company conducts audits of various departments based on an annual audit plan through an independent internal auditor and reports significant observations along with ‘Action Taken Reports to the Audit Committee from time to time. The views of the statutory auditors are also considered to ascertain the adequacy of the internal control system.

The Company regularly updates its risk management policy to protect the property, earnings, and personnel of the Company against losses and legal liabilities that might be incurred due to various risks.

Occupational Health, Safety and Environment

The emphasis on OHSE continues at all of the operations of the Group throughout India. The Company is committed to the best standards in safety and continuously monitors matters related to this. In addition to monthly reviews by the management, the Company has formed a high-level committee comprising three directors and other Company executives, wherein matters concerning the subject are discussed. Safety drills are regularly carried out at all the Groups main facilities.

Although Aegis has a low carbon footprint, efforts are underway to reduce the impact on the environment and improve environmental sustainability. Aegis continues to monitor emissions with the installation of a continuous monitoring system at two locations and investing in pollution control systems. Aegis

has engaged leading engineering institutes to design equipment and model the impact on the environment. These efforts ensure that we are making progress towards our commitment to a more sustainable future.

Human Resources Development

Aegis Group employs over 1,043 people.

As the Company is growing fast, we are committed to the competence development of young managers and recruitment of middle management in specific areas to sustain the future growth envisaged in the business.

Risks and Concerns

Inordinate delays in renewing licences and permits take a significant amount of time and resources, which could be deployed more productively. Project timelines could be extended due to the lengthy and complex process of securing environmental permits.

Corporate Social Responsibility

Aegis Group contributes directly towards the eligible Corporate Social Responsibility (‘CSR) projects and is also a proud contributor to ANaRDe Foundation, a government-accredited NGO. Acting through this Foundation, Aegis has continued to work actively in rural development and poverty alleviation, primarily in Gujarat and Maharashtra.

The Foundation has been engaged in a focused initiative for the benefit of rural communities in India, including afforestation, sanitation, water resource management, and financial inclusion.

The Group contributes to ANaRDe Foundation to fulfil its corporate social responsibility.

Tree planting initiatives initiated by ANarDe Foundation

Forward-Looking Statements

This report contains forward-looking statements based on certain assumptions and expectations of future events.

The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Companys actual results, performance, or achievements could thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information, or events.

Five Year Financial Report

(Rs.in crore)

Operating Results	2020/21	2021/22	2022/23	2023/24	2024/25
Operating Revenue	3,843.46	4,630.98	8,627.21	7,045.92	6,763.79
Earnings before Interest, Depreciation, Tax, ESPP (EBITDA)	503.56	548.40	815.07	993.62	1,120.21
Finance Cost [including Interest (Net), Hedging Cost & Foreign Exchange Loss (Gain)]	(1.96)	(2.95)	44.52	(2.95)	(20.85)
Depreciation and Amortisation Expense	71.60	79.36	125.80	135.26	152.24
Profit Before Tax	433.93	471.99	644.75	861.31	988.82
Tax	86.38	87.05	134.06	189.10	201.41
Profit After Tax	347.55	384.94	510.69	672.21	787.41
Expenses as per Employee Stock purchase plan	98.32	-	-	-	-
Profit After Tax	249.22	384.94	510.69	672.21	787.41
Financial Position
Equity Share Capital	35.10	35.10	35.10	35.10	35.10
Other Equity	1,901.37	2,144.70	3,497.24	3,859.25	4,595.72
Non Controlling Interest	109.02	82.59	514.48	567.53	1,090.65
Total Equity	2,045.50	2,262.39	4,046.82	4,461.88	5,721.47
Less: Bank balances	(335.63)	(150.18)	(1,265.11)	(1,774.63)	(3,190.88)
Less: Investments	(0.01)	(0.01)	(204.33)	(193.98)	-
Adjusted Total Equity	1,709.86	2,112.20	2,577.38	2,493.27	2,530.59
Non-current Borrowings	112.32	64.28	978.43	1,432.20	2,353.10
Current Borrowings	304.12	318.41	16.93	231.02	531.32
Deferred Tax Liability (net)	40.72	(2.47)	(80.90)	(83.49)	(84.69)
Total Capital Employed	2,167.01	2,492.42	3,491.84	4,073.00	5,330.32
Property, Plant & Equipment, CWIP, Goodwill and other Intangible Assets (net of Lease Liabilities)	1,880.54	2,175.72	3,144.29	3,834.21	4,672.39
Net Working Capital	286.47	316.70	347.55	238.79	657.93
Total Net Assets	2,167.01	2,492.42	3,491.84	4,073.00	5,330.32
Adjusted Net Debt #	80.80	232.50	(474.08)	(305.39)	(306.46)
Ratios
EBITDA on Capital Employed *	25.97%	23.54%	27.24%	26.27%	23.83%
Debt: Equity	0.05	0.03	0.24	0.32	0.41
(Non Current Borrowings/Total Equity)
Net Debt: Equity	0.04	0.10	(0.12)	(0.07)	(0.05)

(Adjusted Net Debt / Total Equity)

# Adjusted Net Debt = Non current borrowings + Current borrowings - Bank balance - Investments

* EBITDA on Capital Employed = EBITDA / Average Capital Employed