NCL - FY23 Analyst Briefing Takeaways, (AKD Off the Analyst's Desk Nov 23, 2023)
AKD, Off the Analyst's Desk
NCL - FY23 Analyst Briefing Takeaways
Nishat Chunian Limited (NCL) held its analyst briefing session earlier today to apprise the investors about the FY23 KPIs and the future outlook of the company. Some of the key takeaways from the briefing are as follows
- To recall, NCL reported a LAT of PkR0.9bn (LPS: 4.16/sh) in FY23 compared to a PAT of PkR7.4bn (EPS: 31.10/sh) in the previous year. The spinning segment, contributing ~60-61% of revenue, was the major cause of the loss due to lower yarn exports (22.19% vs 29.28% in the previous year).
- The company has 4 operational divisions namely spinning, weaving, home textiles, power and a retail business i.e., ‘The Linen Company’ with multiple local and international retail outlets.
- NCL has annual cotton requirements of ~4-4.5lac bales, procured competitively at ~PkR17.5K/maund during FY23, which has a local to import ratio of 70:30.
- NCL's power mix includes Coal, gas, LESCO, and standby generators, with the company heavily relying on its coal-based power plant (~90%) for energy needs. Competitive coal rates are achieved through sourcing from Indonesia, South Africa, and local channels. Moreover the coal costs PkR24-28/kwh, while gas costs ~US$8.5/mmbtu.
- The company emphasized no significant expansions for the year, with focus solely on a few BMR activities.
- One-third of the total debt on the books of the company is concessionary debt which comprises of SBP’s subsidized schemes i.e., EFS, TERF and dollar loans, which can be sourced at cheaper rates.
- The divisions spinning, weaving, dyeing & printing and stitching have annual capacities of 86mn kgs, 345.6mn m2, 63.12mn m2 with FY23 utilization standing at 98.5%/89%/55% respectively. Additionally, the company plans to add new ring winders in their spinning division’s Auto Coro unit.
- The company aims to hit the topline mark of PkR90bn for FY24.
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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