Earnings Review - Teejay Lanka PLC Q2FY2018
Easing of cotton prices in the global market will allow for margin improvements and provide a positive sentiment: The cotton price high during the recent past was the main contributor to the margins of the company deteriorating. Expectations are for the cotton prices in the market to ease, considering the most recent performance of the same where a reducing trend has been seen from the high and currently at a more stable position. These price conditions in the company’s key raw material will complement the margins positively.
The improvement in the cotton prices in the market coupled with the potential GSP plus benefits will prove beneficial for the company considering the capacity expansions and the order book position of the entity. As such we estimate a short term price target of LKR 38.50 for TJL, and therefore carry an ACCUMULATE recommendation on the counter at its current price levels.
Candor Equities Limited is licensed and regulated by the Securities Exchange Commission (SEC) of Sri Lanka and is a Trading Member of the Colombo Stock Exchange (CSE). We assist both local and foreign individual and institutional investors with their listed Equity and Debt trading on the Colombo Stock Exchange.
We are a fully fledged financial services group of companies based in Colombo. The newly branded Candor came into commercial existence in May 2013 with EPIL’s acquisition of Heraymila Group Sri Lanka which was in operation since 2010. Candor’s immediate parent is the Dubai International Financial Centre (DIFC) based Eagle Proprietary Investments Limited (EPIL). Our ultimate parent is the National Industries Group (NIG), one of the largest listed companies on the Kuwait Stock Exchange. Candor’s business domain is strengthened with operating licenses comprising of Stock Broking, Asset Management, Investment Management and Corporate Financing, all vital cogs in Sri Lanka’s service sector driven macro economy.
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