Intermarket Intel - NML Result Review: 2QFY18 EPS at PRs5.58, above expectations
- Nishat Mills Ltd (NML) posted 2QFY18 NPAT of PRs1.96bn (EPS: PRs5.58), up 3% YoY. This takes 1HFY18 NPAT to PRs2.67bn (EPS: PRs7.59), up 5% YoY. The 2Q result was slightly above our expectation of PRs1.76bn (EPS: PRs5.01).
- On a sequential basis, the earnings were up 2.77x, on the back of 3.11x QoQ higher other income. Other result highlights included: (i) 8%YoY increase in topline courtesy rebates and 1.07% QoQ PKR depreciation (average), (ii) gross margins are down only by 0.7ppt QoQ to 9.8%, (iii) 9% QoQ higher finance cost and (iv) ETR of 11% vs. 17% in 1QFY18.
- Besides the result, the company also announced dilution of its equity investment in Hyundai Nishat Motor Pvt Ltd (HNMPL) from 76% earlier to 12%. We have not yet incorporated the impact of the said project in our valuations.
- We have a Neutral stance on the scrip with a TP of PRs172/sh, offering an upside of 7.1% on last close.
Nishat Mills is engaged in the business of textile manufacturing and of spinning, combing, weaving, bleaching, dyeing, printing, stitching, buying, selling and otherwise dealing in yarn, linen, cloth and other goods and fabrics made from raw cotton, synthetic fiber and cloth, and to generate, accumulated, distribute and supply electricity.
Intermarket Securities Limited (IMS) is a full service corporate brokerage firm based in Karachi, Pakistan. We service both domestic and international clients. IMS was ranked #2 Best Local Brokerage and #3 Best for Overall Country Research for 2016 by AsiaMoney.
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