Shares of this logistics services provider have limited upside despite growth potential, Jefferies says

Shares of Aegis Vopak Terminals Ltd., which have gained only 5% from their initial public offering (IPO) price of ₹235, could rise another 15%, according to global brokerage firm Jefferies.Jefferies has initiated coverage on the stock with a ‘Hold’ rating and a price target of ₹270, implying a potential upside of 9% from Tuesday’s closing price.

The brokerage described Aegis Vopak as a structural play on India’s growing consumption of Liquefied Petroleum Gas (LPG), which is increasingly being met through imports. The company operates a nationwide network of storage terminals for LPG and other liquid bulk products.

Jefferies expects the company to deliver a 28% compound annual growth rate (CAGR) in earnings before interest, taxes, depreciation, and amortisation (EBITDA) between financial year 2025 and 2030. This growth is likely to be driven by a mix of organic and inorganic capacity additions, as well as better utilisation of assets aided by evacuation infrastructure such as pipelines and rail connectivity.
“For FY25-30, we forecast a 28% EBITDA CAGR for Aegis Vopak, compared to 23% for JSW Infrastructure (JSWI), which has back-ended growth. Both companies are expected to have a similar return on capital employed (RoCE) and return on equity (RoE) by FY28. Our ₹270 target price is based on 27 times enterprise value to EBITDA (EV/EBITDA) for September 2027 estimates, in line with JSWI, and reflects a 9% potential upside,” Jefferies wrote.Key upside risks include higher-than-expected capacity utilisation and value-accretive acquisitions. However, downside risks remain, such as delays in the Kandla–Gorakhpur pipeline project, weaker LPG import trends or market share losses, and expansion projects that may dilute value.

Jefferies said that the stock is currently trading at 34 times its 12-month forward EV/EBITDA, which could cap further upside in the near term.

Established in 2013, Aegis Vopak Terminals was a joint venture between Aegis Logistics and Vopak India BV (part of Royal Vopak, a Netherlands-based leading global tank storage company).

Aegis Vopak provides tank storage and handling services for various types of liquids and LPG gases and is India’s largest third-party owner and operator of tank storage terminals for LPG and Liquid products. The company offers secure storage and associated infrastructure for products like petroleum, chemicals, lubricants, vegetable oil and LPG.

Aegis Vopak Terminals Ltd. shares ended 1.91% lower on Tuesday at ₹247. The stock is down 1% in the last one month.