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Friday, October 19th, 2018

The Bell about – NCL: 9MFY13 EPS expected at PKR8.0 – Elixir Securities Limited

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by April 25, 2013 Brokerage

Karachi, April 25, 2013 (PPI-OT): Result expectation: The board of Nishat Chunian Limited (NCL) is expected to meet and approve the 9MFY13 results on Saturday April 27, 2013 and financial results will likely be announced on April 29, 2013.

According to Elixir Securities Limited expects the company to post PAT of PKR1,455mn (EPS: PKR8.0), up 10x YoY. 3QFY13 EPS is estimated to clock in at PKR2.6, up 4.7x YoY. NCL’s core earning for 9MFY13 is likely to clock in at PKR3.6/share against a loss of PKR2.7/share during the same period last year.

Financial Highlights No. of shares 182 mn
PKRmn 3QFY12A 3QFY13E YoY 9MFY12A 9MFY13E YoY
Net Sales

4,995

5,498

10%

13,250

15,170

14%

Cost of Sales

4,586

4,818

5%

12,142

12,932

7%

Gross Profit

409

680

66%

1,109

2,237

102%

Admin and Selling Exp

158

187

18%

465

508

9%

Finance Cost

367

274

-25%

1,015

874

-14%

Other income

284

359

26%

694

892

29%

Other expenses

18

32

77%

27

92

245%

Profit before tax

150

547

265%

296

1,656

460%

Taxation

68

82

21%

166

201

21%

Profit after Taxation

82

465

468%

130

1,455

1021%

EPS (PKR)

0.4

2.6

468%

0.7

8.0

1021%

Core EPS (PKR)

(1.0)

0.8

n.a

(2.7)

3.6

n.a

Source: Elixir Research, Company Accounts

Fuel surcharge to hamper earnings: Elixir Securities Limited expects NCL’s fuel and power cost to increase during 3QFY13 on account of fuel surcharge adjustment by NEPRA which has been booked by several other companies during 3QFY13. Given that NCL fulfils some of its energy requirements from Wapda, Elixir Securities Limited expects NCL’s fuel and power cost to clock in at ~14% of sales, up 1pp QoQ.

Primary margins to remain strong during 3Q: NCL’s 1HFY13 primary margin improved by 10pp YoY (+7pp HoH) to 46%, given the rising yarn prices owing to strong yarn demand from China and flat cotton prices. Since NCL has procured its cotton for FY13 at PKR~5,700 per maund, down 2% YoY, Elixir Securities Limited expects primary margins to remain at 46% of sales during 3QFY13.

BUY maintained: NCL is currently trading at 4.3x FY13 earnings and offers a 26% upside to Elixir Securities Limited Dec-13 PT of PKR62 per share. BUY!

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