India’s factory boom needs more than factories: 2 stocks, one with 50%+ EBITDA margins

These are the companies that work behind the scenes, providing the logistical support and services that keep supply chains going. Two such players are LEAP India and Aegis Logistics. They both have a strong position in the specialized parts of the supply chain. LEAP focuses on pallet pooling, whereas Aegis runs port-based LPG and liquid storage terminals. However, their contrasting financial performance and stock market valuations offer an interesting way to examine these two less-discussed stocks in India's logistics opportunity.

FE Stock Insights on WhatsApPGet instant alerts on high-conviction investment themes and fundamental deep dives—direct from Financial Express.Join now #1 LEAP India: Dominant Position, but Margins and Asset Utilisation Key LEAP India is the country's largest on-demand asset-pooling provider, with an estimated 90% market share in the organised pallet-pooling market. Pallets are flat portable platforms that are used as the base for stacking, securing, and transporting goods.

It manages around 14.9 million pooled assets, including 9.2 million pallets, and serves over 1,000 customers across 10,500 touchpoints and 28 fulfilment centres. Highly Under-penetrated Market Despite LEAP’s dominant position, it operates in a market that is still at an early stage of development. Only 9.4% of pallets in India are pooled, compared with around 45% in Europe and 55% in North America.

This gap offers significant room for growth as manufacturers increasingly look for ways to reduce logistics costs, improve asset utilisation, and drive greater efficiency in supply chains. Management expects the market size of pooled pallets in India to double to 20 million by FY31, which translates into an annual growth of 14.9%. Financial Performance: Growth Is Improving, but Margins Need Attention LEAP has demonstrated that its business model works and is expanding rapidly at present.

The company’s revenue from operations has grown at a compound annual growth rate (CAGR) of 42.3% over the last four years, from ₹253.4 crore in FY23 to ₹729.5 crore in FY26. Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) grew faster than revenue at a 44.2% CAGR. Net profit also increased from ₹9 crore to ₹62.3 crore during the same period. However, the growth has not been entirely smooth.

EBITDA margins improved from 48.9% in FY23 to 56.5% in FY25, but declined to 50.7% in FY26 Annual Financial Performance ParticularsFY23FY24FY25FY26CAGRRevenue from Operations (₹ crore)253.4365.0466.5729.542.3%EBITDA (₹ crore)126.3209.9273.8378.844.2%EBITDA Margin (%)48.9%56.4%56.5%50.7%-Net Profit (₹ crore)9.037.237.662.390.5% Source: Company Presentation Strong growth momentum continued into Q1FY27.

Revenue from operations at ₹ 203.4 crore grew by 19.1% YoY. The EBITDA margin improved by 110 basis points to 53.5%, and this led to net profit growth outpacing revenue growth. Quarterly Financial Performance PeriodQ1FY26Q1FY27YoY Change (%)Revenue from Operations (₹ crore)170.8203.419.1%EBITDA (₹ crore)94.3114.121.0%EBITDA Margin (%)52.4%53.5%110 bpsNet Profit (₹ crore)19.024.730.0% Source: Company Presentation Why 50% Operating Margins Yield Single-Digit Return on Equity Margins are widening, indicating better operating leverage, but these improvements have yet to show up in the bottom line.

EBITDA margins have been consistently above 50%, but net profit margins have mostly remained below 10% and were only 8.3% in FY26. The main reason for this gap is the asset-heavy model of LEAP, which leads to higher depreciation and financing costs. Movement Hire: A Key Lever for Improving Returns Globally, each pallet makes an average of 4 trips annually compared with just 0.4 trips in India. LEAP aims to bridge this gap.

Traditionally, LEAP has operated on a “Static Hire” model, renting out pallets to customers for a specified period. It is slowly moving to a “Movement Hire” model. Revenue is generated in this model for each movement of a pallet from one place to another within the supply chain. This allows LEAP to derive higher revenue from the same asset without having to invest correspondingly more capital. As per JM Financial's report, revenue share from Movement Hire has increased from 18% in FY23 to 35% in FY26, and is likely to go up to about 45% by FY30.

A greater share of Movement Hire could help LEAP’s bottom line and capital efficiency. #2 Aegis Logistics: Structural Margins Expand, Financial Resilience Strengthens Aegis Logistics is in a different segment of the logistics industry as compared to LEAP India. It is primarily an LPG and gas trading and distribution company, sitting at the intersection of logistics and energy infrastructure, with operations in gas storage, handling, and transportation.

Aegis Logistics’ business spans global sourcing, shipping, port-based storage, and distribution to industrial, commercial, and retail customers. This has strengthened its balance sheet as well as its earnings profile. Improving Earnings Profile Aegis witnessed a remarkable change in its earnings profile. Historically, Aegis generated an EBITDA of around ₹4,000 per metric tonne (MT) from its LPG distribution business.

Recently, it has gone up to over ₹7,000 per MT, supported by efficiencies in procurement, higher volumes, and the use of Very Large Gas Carriers (VLGCs) that helped to bring down freight costs. Annual Financial Performance PeriodFY25FY26YoY Change (%)Revenue (₹ crore)6,7648,33323.2%EBITDA (₹ crore)1,1731,59936.3%EBITDA Margin (%)17.3%19.2%190 bpsNet Profit (₹ crore)7881,10740.5% Source: Company Presentation Aegis’ revenue grew 23.2% YoY to ₹8,333 crore, and EBITDA grew faster at 36.3% to ₹1,599 crore in FY26.

During the period, the EBITDA margin expanded by 190 basis points to 19.2%. Quarterly Financial Performance PeriodQ1FY26Q1FY27YoY Change (%)Revenue (₹ crore)1,7192,357.037.1%EBITDA (₹ crore)256727184.0%EBITDA Margin (%)14.9%30.8%1,590 bpsNet Profit (₹ crore)175.0545.0211.4% Source: Company Presentation Higher margins from LPG distribution business reflected in Q1FY27 financial performance. Revenue increased 37.1% YoY to ₹2,357 crore, while EBITDA nearly tripled to ₹727 crore, with EBITDA margin expanding from 14.9% to 30.8%.

AVTL Liquidity Provides a ₹5,900-Crore Capex Cushion Through its subsidiary, Aegis Vopak Terminals (AVTL), Aegis is expanding storage infrastructure across key ports and improving connectivity through pipelines and rail links. Major projects include an additional 94,148 cubic metres of liquid storage at Kandla and 49,577 cubic metres at Kochi, taking Aegis’ total storage capacity beyond 132,000 cubic metres.

Aegis is also diversifying beyond LPG and liquid storage. It has commissioned a 36,000 MT ammonia terminal at Pipavav, which it describes as India's first independent ammonia storage terminal. The terminal serves as a foundational platform for future energy markets. Aegis aims to replicate its highly efficient LPG distribution model for ammonia. For investors, key metrics to monitor will be how quickly the additional capacity translates into higher volumes and earnings.

Aegis, with liquidity reserves of around ₹5,900 crore, will be able to self-fund large acquisitions and absorb external shocks even as it aggressively expands. Aegis Logistics: 1 Year Stock Chart Source: Screener.in Valuations: Aegis Offers Stronger Returns at a Lower Multiple LEAP India trades at a trailing P/E of 92.8, significantly higher than Aegis Logistics, which trades at 35. Aegis trades at a P/E marginally higher than its five-year median of 31.9, while LEAP has no valuation history to compare with because of its recent listing.

P/E Trend CompaniesTrailing P/E5-Yr Median P/ELEAP India92.8-Aegis Logistics35.031.9 Source: Screener.in (as of 24th October 2026) Return on Capital Efficiency (FY26) Financial MetricsLEAP IndiaAegis LogisticsReturn on Equity6.50%30.16%Return on Capital Employed19.10%31.71% Source: Company Presentation Aegis has better return ratios, a sign of better capital efficiency and profitability. LEAP has a dominant position in pallet pooling but its lower ROE reflects the challenges of converting its growing asset base into shareholder returns.

For LEAP, improving asset utilisation and profitability will be important to justify its premium valuation. The premium valuation gives very little margin for error for the company. Aegis, meanwhile, will need to sustain its earnings growth and ensure that its large expansion programme generates returns in line with its existing business. The Real Test Is Turning Capacity into Returns Both companies are positioned to benefit from India's expanding supply-chain infrastructure, but their investment cases are at different stages.

LEAP has a strong market position and room to deepen pallet pooling, but needs to improve on profitability metrics and return efficiency. Aegis has a stronger earnings and return profile, though its large expansion programme must deliver adequate returns. For investors, the key distinction is between the potential to grow and the ability to convert that growth into profits. Add these stocks to your watchlist and monitor how they execute their growth plans.

This article is strictly for educative purposes only. Deepan Datta has spent over a decade studying stocks and mutual funds. His passion is to uncover interesting stories in the financial markets and share them through his writings with investors at large. He is focused on delivering clear, easy to understand and research-backed insights. Deepan began his career as a Research Associate at S&P Global, where he developed a strong foundation in financial research and data analysis.

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