Aegis Logistics -- Buy

Aegis Group, claims to be "a leader in Oil, Gas and Chemical Logistics and has a strategy to build a necklace of terminals around India’s coastline enabling it to offer comprehensive facilities at every gateway into and out of India for a large number of cargoes to its customers.” The company was recently allotted additional 5 acres of land in Kandla Port making a total of 20 acres. Further, the company was allotted 3 acres of land in New Mangalore Port on 30 year lease by the MPT. With these land allocations, Aegis Logistics will expand its presence to Six Ports of India – Mumbai, Pipavav, Kandla, Kochi, Haldia, and New Mangalore. These ports together manage 70% of POL Traffic handled by the Major Ports in India.  

The Q2 results are to be announced on  Nov 3rd along with a proposal to pay interim dividend. This indicates that the working of the company for Q2 is likely to be robust. In the last 2 quarters, the promoters shareholding has

gone up marginally which shows their confidence in the business. The share price has come down from Rs.900 to Rs.88 on stock split (10:1).The P/V action has more than doubled which shows buying from interested quarters.

The share can be bought at the present market rate for an initial target price of Rs.120 over a 3 months time frame. However, with growing emphasis on infrastructure, the share can be bought & held on a longer time frame (9 - 12 months), subject to further review. The broader market is likely to remain robust on both domestic & global cues with the Nifty going above 8,300, reduction of lending rate by China and more stimulus expected from ECB. However, F&O rollover and Fed meet on OCT 28, can keep the market on a subdued level with intermittent profit booking.

Contributed by a friend Analyst Mr G R CHARI