The LPG supply disruptions were triggered by the sustained closure of the Strait of Hormuz as Iran attacked any ship attempting to pass through, as part of its retaliation against the military strikes by Israel and US that killed its supreme leader Ayatollah Khamenei earlier this month.
LPG remains the most closely tracked fuel during the crisis because it directly affects household cooking costs. India imports more than 60% of its LPG consumption, and roughly 85-90% of these imports typically pass through the Strait of Hormuz.
JM Financial sees the LPG shortages to persist in the near term (approximately one month), which would likely bear an impact on Aegis Logistics and Aegis Vopak Terminals’ logistics assets. In the medium term however, the domestic brokerage expects LPG import disruptions partially alleviating.
LPG prices may increase further
JM Financial explained why it believes LPG prices can increase further in the near term. Propane supplies from Saudi Arabia, Qatar and Kuwait could be constrained due to sustained closure of the Strait of Hormuz and reported disruptions to the Bab El-Mandab sea route via the Red Sea. “Thus, propane supplies to India could come partially from the UAE and a smaller proportion from the US,” it added.
However, US has recently shifted its exports out of China to other countries, prompting China to increase its propane imports from the Middle East. China’s propane imports in fact have surged recently due to the rise in propane dehydrogenation (PDH) capacity. JM Financial sees this as a reason for increased competition for propane being exported by UAE, leading to rise in prices.
“Furthermore, while India has inked a propane supply contract with the US, that could cushion the impact somewhat, but delivery of these supplies could take longer. Thus, while Saudi CP prices have been retained in Mar’26 versus Feb’26, prices or propane delivered to India could rise,” it added.Over the medium term however, US can increase supplies which in turn can cool off prices slightly. India has inked an LPG supply contract with the US for supply of 2mmtpa of LPG (10% of India’s annual imports). Propane inventory levels at the US are at significantly elevated levels versus their five-year average. “This could cushion some of the disruption to supplies from the Middle East. However, the transit time from US to India has risen by 10–15 days as ships must travel via the Cape of Good Hope rather than the Strait of Hormuz,” JM Financial explained.
JM Financial on Aegis Vopak Terminals
The brokerage assumed that the geographic sourcing of LPG imports at Aegis Vopak’s terminals mirrors India’s overall LPG import sources, and that disruptions shall persist for 1–1.5 months. “All in all, we are cutting FY26E/27E EBITDA for AVTL by 5–6% factoring in weaker LPG logistics volumes,” it said.
India imported 50% of its LPG needs from Qatar, Kuwait and Saudi Arabia in 2025, but these supplies have been disrupted either due to operational issues at refineries or logistics constraints as ship movement via the Strait of Hormuz has come to a halt, JM Financial said. “Our channel checks suggest that partial LPG supplies from the UAE, which accounted for 40% of India’s LPG imports, continue via the Fujairah terminal,” it added.
In addition to the current supply disruptions, Aegis Vopak’s Q3 FY26 gas segment EBIT was adversely impacted by low utilisation and start-up costs in Mangalore. JM Financial said that LPG volumes at the company’s Mangalore terminal remained weak in January and February of 2026 as well.
“Incorporating disruptions to LPG supply, we are cutting FY26E/27E LPG volumes by 8-9%. Our estimates for liquids EBITDA remain unchanged in the near term. They could benefit in the medium term as storage requirements for petrochemicals increase led by supply chain constraints. All in all, we are cutting FY26E/27E consolidated EBITDA by 3-4%, driving down EPS estimates by 5-6%,” the brokerage said.
JM Financial maintained a ‘Buy’ rating on the stock, but reduced its target price to Rs 330 apiece. This implies an upside potential nearly 71% from the stock’s previous closing price of Rs 193.27 apiece on NSE.
JM Financial on Aegis Logistics
The Indian government has prioritised LPG supply to residential consumers while restricting industrial usage. JM Financial said this could benefit the distribution segment of Aegis Logistics (ALL). “Even so, our estimates for ALL edge down by 2% each for FY26E and FY27E as the distribution segment partially compensates for the downward revisions to logistics estimates for the gas segment,” it added.
The brokerage cited media reports claiming that there have been disruptions to propane supplies to industrial clusters in Morbi. The government asked OMCs to prioritise LPG/propane to domestic customers over industrial usage, and has also restricted the supply of industrial PNG. “This supply crunch of propane and PNG could benefit the distribution segment margins for Aegis Logistics,” it said.
“We are cutting LPG volume throughput volume estimates for ALL to incorporate near-term LPG import supply disruptions and slower-than-expected volume ramp-up at the Mangalore LPG terminal. However, we are raising estimates for the distribution segment partially offsetting the downward revision in estimates for LPG logistics. Our estimates for liquids EBITDA remain unchanged in the near term,” JM Financial said.
The brokerage maintained its ‘Buy’ call on the shares of Aegis Logistics, but reduced its target price to Rs 935 apiece. This implies an upside potential of nearly 52% from the stock’s previous closing price of Rs 616.55 apiece on NSE.
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