Baqar Hussain- Attock Cement Private Limited: Revenue improved by 4%YoY to PKR 13bn in FY15 on the back of 9%YoY rise in local net retention price to PKR 340/bag.
- Gross margin improved by 407bpsYoY to 34% in FY15 on the back of lower coal and energy cost.
- Selling and admin expenses hopped up by 20%YoY to PKR 1.33bn in FY15 on the back of 11%YoY growth in exports to 763kT.
- Effective tax rate for the period has gone up by 794bpsYoY to 32% owing to imposition of 3%super tax and higher proportion of export sales.
- ACPL declared final dividend of PKR 10.50/share, taking the total payout for FY15 to PKR14.50/share.
- The company in its meeting also approved the proposal of enhancing its production capacity by 3300T/day (0.99mnT) with an estimated cost of USD 120mn.
Outlook& Recommendation
The scrip is currently trading at FY16 P/E of 9.7x. With TP of PKR 265/share, the stock offers upside of 32% and we maintain a ‘BUY’ call on the scrip.
| Exhibit: Financial Highlights | |||
| FY15 | FY14 | YoY | |
| Revenue | 13,086 | 12,547 | 4% |
| Gross Profit | 4,396 | 3,704 | 19% |
| Selling and Admin | 1,334 | 1,113 | 20% |
| Other Income | 423 | 269 | 57% |
| Tax | 1,015 | 621 | 63% |
| Net profit | 2,206 | 2,014 | 10% |
| EPS | 19.26 | 17.58 | 10% |
| DPS | 14.50 | 13.00 | 12% |
| Key Ratios | |||
| Gross Margin | 34% | 30% | |
| Net Margin | 17% | 16% | |
| Effective Tax Rate | 32% | 24% | |
| Source: IGI Research, Company Financials | |||
Syed Zaki Hussain
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