FCCL_Flying under the radar,(AKD Daily, Mar 28, 2023)
AKD Daily
FCCL: Flying under the radar
- FCCL commissioned its Nimazpur capacity expansion of 2.05mn tons per annum in late Oct’22. Moreover, another capacity expansion of 2.05mn TPA at D.G Khan is in pipeline and expected to be commissioned in 2QFY24. Post D.G Khan's expansion, company will be the third largest cement producer in Pakistan with total cement capacity of 10.5mn TPA.
- Current coal mix stands at 53%/44% of local/Afghan coal while there is only a mere 3% reliance on imported coal. We expect gross margins for FY23/FY34 to clock in at 27.7%/29.0%.
- FCCL has 28.6MW of Solar Power and 47.5MW of WHR capacity, currently contributing to around 28% to the power mix. Total reliance on self generated power is around 42%.
- Company has manageable debt on its books with a D/E of 0.50 and D/A of 0.25 compared to D/E: 0.61 & D/A: 0.30 of AKD Universe (EX-LUCK). Moreover, ~44.3% of the total long-term debt is in subsidized loans (TERF & LTFF).
- We have a “Buy” rating on the stock, with Dec’23 TP of PkR16.4/sh, offering an potential upside of 40% from the stock’s last close.
AKD Research
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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