Standard Capital Securities (Pvt) Ltd.
Maple Leaf Cement (MLCF) is a key player in the northern zone, operating with the production capacity of 3.37mn tons/annum. MLCF will announce 1QFY16 result on October 19, 2015 wherein, as per our estimations, company may post an EPS of Rs1.75/sh as against Rs 1.03/sh reported in the same period last year.
- The thrust of increase in revenue is due to the increase in the local dispatches. The upward movement of the demand results in an increase in revenue by 10% which in result will help in posting the total sales revenue of Rs. 4,898mn against Rs 4,453mn in the same period last year;
- Lower coal and oil prices helped in controlling costs and thus reducing the cost of sales by4% YoY;
- With higher sales and lowering costs, we expect gross margin to increase by 21% YoY;
- Given increased sales, MLCF started wiping out debts, which the company is doing since two years.
- The covenant of non payment of dividend removed with a robust display of accelerated payments of long term debt.
- This indeed is a good omen for general &Shariah compliant investors.
Valuations: low PE
MLCF deciphers FY16 PE of 7.8x–8.2x.