FCCL_3QFY21 EPS clocked in at PkR 0.73 (In-Line), (AKD, Off the Analyst's Desk, April 23, 2021)
AKD, Off the Analyst's Desk
FCCL: 3QFY21 EPS clocked in at PkR 0.73 (In-Line)
- Fauji Cement Company Ltd. (FCCL) reported earnings for 9MFY21 where company posted PAT of PkR2.6bn (EPS: PkR1.89), up 9.6xYoY against PAT of PkR272mn (EPS: PkR0.20) for 9MFY20. For 3QFY21, PAT clocked in at PkR1bn (EPS: PkR0.73), increasing by 12%QoQ. The result was in line with our expectations.
- Gross margins for the quarter increased by 5ppts to 30% as prices during the quarter improved while we believe company also utilized low cost coal inventory. For 9MFY21, gross margins clocked in at 26% against 7% for 9MFY20.
- Topline of the company increased by 51%YoY on the back of improvement in dispatches and prices however declined by 3%QoQ where we believe lower dispatches and high discounting played its part. For 9MFY21, topline of the company increased by 30%YoY to PkR17.5bn.
- Operating expenses for the quarter increased by 14%YoY while declining by 16% on sequential basis. Surprisingly tax rate for quarter stood at 35% against 25/27% for 3QFY20/2QFY21.
- Though intensifying COVID-19 is expected to keep the stock and overall market under pressure, we believe the continued growth in dispatches and the resultant increase in prices as manufacturers gain pricing power will continue to drive earnings growth. Our TP of PkR39.1/sh provides an upside of 66.2%.
- AKD Research
Fauji Cement is engaged in the manufacturing and marketing of cement.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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