NML - 3QFY23 Result Review Margin attrition at play, (AKD Off the Analyst's Desk Apr 28, 2023)
Nishat Mills Limited (NML) announced its 3QFY23 earnings earlier today, wherein the textile manufacturer recorded NPAT of PkR3.3bn (EPS: PkR9.4) for the quarter, lower by 10%QoQ and 4%YoY. The earnings were higher than our estimates.
- NML’s revenues clocked in at PkR37.1bn during 3QFY23, higher by 12% compared to the earlier quarter. The growth in the topline can be attributed to the devaluation of the PkR against the greenback.
- NML’s gross margins have clocked in at 13.1% in 3QFY23, compared to 14.4% in the earlier quarter. The lower margins can be attributed to higher input costs, in the form of increased energy costs and raw material costs.
- Overheads at NML also saw an increase on a sequential basis, wherein Distribution expenses witnessed an increase of 14%QoQ to PkR1.5bn in 3QFY23. Furthermore, Admin Expenses also increased by 5%QoQ to PkR534mn during the quarter.
- Finance costs saw a substantial increase during the period, to the tune of 34%QoQ, as interest rates in the country were hiked substantially during the quarter. The finance costs correspond to ~43% of gross profit earned during the three-month period.
- In 9MFY23, the company posted earnings of PkR11.1bn (EPS: PkR31.7), higher by 23% compared to the SPLY. The growth in profitability is largely attributable to non-operating factors, including 105%QoQ increase in Other income.
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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