NCL - 3QFY23 Result Review - Turning Green in 3QFY23, (AKD Off the Analyst's Desk Apr 28, 2023)
Nishat Chunian Limited (NCL) announced its 3QFY23 earnings earlier today, wherein the company posted NPAT of PkR389mn (EPS: PkR1.6) for the quarter, compared to a loss of PkR1.7bn (LPS: PkR7.1) in the earlier quarter. The earnings posted by NCL are substantially higher than our estimates.
- NCL posted revenues of PkR17.4bn during 3QFY23, higher by 21%QoQ and 8%YoY. The growth in the company’s topline is likely being driven by higher local currency recognition of export proceeds. To recall, the currency lost ~25.7% during the period.
- The company was able to increase its gross margins on a sequential basis, from a meager 2% in the previous quarter to 9% in 3QFY23, which was a major driver of earnings during the period. Resultantly, NCL’s gross profit improved by 4.8xQoQ.
- Another boost to earnings came in the form of higher-than-expected other income, wherein the company posted PkR853mn (PkR3.6/sh), higher by 5.1xQoQ and 6.5xYoY. The heightened other income is largely driven by exchange gains during the period.
- Finance costs clocked in at PkR1.5bn, higher by 5%QoQ and 1.2xYoY, despite the increasing interest rate environment in the country. This can be explained by lower than anticipated short-term borrowing requirement during the period.
- In 9MFY23, the company has posted ~PkR1.4bn in losses, compared to PkR6.7bn in profits in the SPLY. The losses so far this year can be attributed to: i) lower export orders and ii) higher cost of doing business due to increased energy costs and raw material costs.
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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