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Media reports suggest that the Strait of Hormuz (Persian Gulf) has been closed and there are disruptions to the route via the Red Sea as well. India imports ~65% of its LPG, of which 90%+ comes from by the Middle East. The logistical chokehold due to blocking of the Strait of Hormuz/Red Sea is likely to hurt India’ LPG imports in the near term (~one month), which would have knock-on effects on throughput volumes for AVTL’s and Aegis’ LPG logistics assets. Over medium term (> one month) though, we expect LPG import disruptions to partially alleviate led by propane supplies from the US—given supply contract was signed. We assume the geographic sourcing of LPG imports at AVTL’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. The GoI has prioritised LPG supply to residential consumers while restricting industrial usage. This could benefit the distribution segment of Aegis Logistics. 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.

* Near-term disruptions due to constraints in supply from the Middle East, medium term, LPG supplies from the US could provide some support: We assume the geographic sourcing of LPG imports at AVTL’s terminals mirrors India’s overall LPG import sources. In CY25, India sourced ~50% of its LPG from Qatar, Kuwait and Saudi Arabia; those 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. 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 (Exhibit 1:Exhibit 1:). We expect these disruptions to persist in the very near term (~one month). Over medium term (>one month), we expect some supplies from the US to flow into India. India has inked an LPG supply contract with the US for supply of 2mmtpa of LPG (~10% of India’s FY25 import volumes). Propane inventory levels at the US are at significantly elevated versus their 5Y average. This could cushion some of the disruption to supplies from the Middle East.

* Mangalore LPG volumes remain weak: AVTL’s 3QFY26 gas segment EBIT was adversely impacted by low utilisation and start-up costs in Mangalore. LPG volumes at the Mangalore terminal remained weak in Jan’26 and Feb’26 with average monthly run rate lower than that in 3QFY26 as well.

* Liquid volume estimates unchanged: Our discussion with AVTL/ALL management suggests that liquid terminals are currently running at optimal utilisation levels. Furthermore, supply chain disruptions could lead to companies maintaining higher storage levels of petchem at ports. This could benefit liquid segment for ALL/AVTL over FY27E/28E, leading to some upside risk to our estimates.

* Restrictions to industrial supplies could benefit distribution segment for Aegis Logistics: According to media reports , 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. Industrial PNG supply is also restricted. This supply crunch of propane and PNG could benefit the distribution segment margins for Aegis Logistics.

* Revising down AVTL’s FY26E/27E EBITDA by 3–4%, driving down EPS estimates by 5–6%: 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%.

* Revising down ALL’s FY26E and FY27E EBITDA by ~2% each: 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.

LPG disruptions to impact near-term EBITDA

Near-term disruptions due to constraints in supply from Middle East

In CY25, India sourced ~50% of its LPG from Qatar, Kuwait and Saudi Arabia. These supplies have been disrupted either due to operational issues at refineries or logistics chokehold as ship movement via the Strait of Hormuz has stopped. 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. We expect these disruptions to persist at least in the very near term (1–1.5 months). These supply disruptions have already started impacting LPG supply in India. OMCs have raised the time gap between delivery of the next cylinder to a customer to 21 days (versus 15 days earlier). Furthermore, the government has prioritised LPG/propane supply to domestic customers over industrial usage. According to media reports, there have been disruptions to propane supplies to industrial clusters in Morbi.

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