Cherat Cement Company Limited – Result Preview FY15 – By Azee Research

[button color=”” size=”” type=”square_outlined” target=”” link=””]In our today’s morning report we will discuss the upcoming board meeting of Cherat Cement Company Limited (CHCC) for the FY15 which is scheduled on August 17, 2015, following are the details.[/button]

Profitability to hike by 30% QoQ: Company likely to post 30% QoQ growth in earnings as profit after taxation to jump at Rs 389 million (EPS: Rs 2.20) against PAT of Rs 298 million (EPS: Rs 1.69) owing to better dispatches as it would rise by 30% QoQ to 272k tons in 4QFY15 versus 208k tons in 3QFY15 and lower coal prices, despite higher effective taxation due to imposition of super tax.

Higher effective taxation to limit earnings growth in FY15: On cumulative basis for FY15, earnings to marginally surge by 1% to Rs 1,327 million (EPS: Rs 7.51) as against Rs 1,316 million (EPS: Rs 7.45) in FY14. This is expected due to surge in volumetric sales by 2% YoY in FY15, higher retention prices, lower coal prices and hike in other income.

Top line to swell by 2%: Net sales likely to surge by 2% to Rs 6.58 billion in FY15 against Rs 6.45 billion owing to the higher volumetric sales. Cement volumes increase by 2% to 971k tons versus 949k tons in FY14 owing to better demand mainly driven by local cement sales. Cost of sales to surge by 7% to Rs 4.64 billion versus Rs 4.34 billion in FY14 due to increase in electricity cost. Gross profit likely to fall by 8% to Rs 1.94 billion versus Rs 2.10 billion in FY14. Similarly, gross margin is expected to drop by 310bps at 29.5% in FY15 against 32.6% in FY14.

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