Tariq Glass Industries Limited, (AKD Research Jun 11, 2021)
Tariq Glass Industries Limited
- With Construction sector continuously in the limelight, attention has also been placed on Construction Allied where Tariq Glass Ltd. (TGL) has performed 120%FYTD owing to strong 9MFY21 results. Our conversation with Management indicates TGL has been operating close to capacity with consequent results likely to provide further upsides.
- Owing to continued strong demand, the company has recently doubled its float glass manufacturing facility where float glass Plant II with a nameplate capacity of 550tpd commenced operation in Apr’21. 4Q earnings consequent to Plant II operations are therefore expected to clock in at PkR6.39/sh, compared to PkR4.59/sh in 3QFY21, an increase of 39%QoQ.
- That said, management has indicated likelihood of float glass plant I (capacity: 550tpd) to undergo maintenance in Dec’21 where we have conservatively incorporated a 3M maintenance period. Paring gross margins at 22% (current: 25%) and incorporating float glass plant I capacity to come back online in 2HFY22 and operating thereafter at 70%, our back of the envelope calculations suggest full year FY21 and FY22 earnings at PkR18.3/sh and PkR19.1/sh, respectively – FY22 earnings incorporate 1Q downtime in Float glass plant I and Tableware capacity.
- At current levels, TGL trades at an undemanding FY22 P/E of 5.96x which compares favorably with Cement Sector and Steel sector FY22 P/E ratios of 8.3x and 7.5x, respectively and offers an FY20-FY23 earnings CAGR of 61.6%.
AKD Research
Tariq Glass Industries Ltd. Tariq Glass Industries Limited is a Pakistan-based glass manufacturing company. The Company is primarily engaged in the manufacture and sale of glass containers, tableware and float glass. The Company's brands include Toyo Nasic, Omroc and Nova. The Company's plant has a production capacity of 300 metric tons of glass tableware per day. The Company has a combination of single and double gob press machines, as well as H-28 press and blow and stretch machines for a range of products. The Company has a capability of printing six colors simultaneously, including gold and silver banding. The Company's tableware product category includes Press & Blow, including Goblets, Ice Cream Cups, Tumblers and Decorated Items, and Pressware, including Ashtray, Cake Sets, Fruit Set, Jugs, Mugs, Tea Sets and Water Sets. The Company's float glass product category includes Clear, Mirror, Sandblasted, and Tinted/Reflective. The Company has presence in India and Afghanistan, among others.
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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