NCL_4QFY23 Result Review -Improving margins enhances earning ,(AKD Off the Analyst's Desk Sep 28, 2023)
AKD, Off the Analyst's Desk
NCL: 4QFY23 Result Review -Improving margins enhances earning
Nishat Chunian Limited (NCL) announced its 4QFY23 results today where the company posted an unconsolidated NPAT stood at PkR0.44bn (EPS: PkR1.9) compared to PkR389mn (EPS: PkR1.6) in the previous quarter. The earnings posted by NCL are substantially higher than our estimates.
- NCL posted revenues of PkR20.5bn during 4QFY23, higher by 18%QoQ. The growth in the company’s topline is likely being driven by higher local currency recognition of export proceeds. To recall, the currency lost ~10% during the period.
- Gross margins for the quarter improved by 450bps, clocking in at 14.1% vs 9.6% in the previous quarter. This positive growth is majorly due to rupee devaluation along with decline in local cotton prices (↓1%QoQ).
- Finance cost clocked in at PkR1.6bn, higher by 9%QoQ, due to interest rate hike during the period.
- Furthermore, effective taxation is reported at PkR417mn (ETR: 46% vs 25% in previous quarter), owing to retrospective supertax implementation.
- Company LAT stood at PkR1.0bn (LPS: PkR4.2) compared to PAT of PkR7.5bn (EPS: PkR31.1) in SPLY. The losses may be attributable to: i) lower export orders, ii) higher energy and operational costs, and iii) higher financial charges in FY23.
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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