FCCL to report an EPS of PKR 0.76 for 3QFY18
Fauji Cement Company Limited (FCCL) posted earnings of PKR 824m (EPS: PKR 0.60)in 2QFY18, reporting growth of 19% YoY despite a decline in topline by 6% YoY. FCCL reported a growth of 9% in its total dispatches for the period, which also raised the company’s cost of sales by 11% YoY. Moreover, the company’s selling expenses during 2QFY18 grew by 93% YoY mainly because of higher export dispatches. Going forward, the company is scheduled to announce its 3QFY18 result on April 17, wherein we expect FCCL to post earnings of PKR 1,050m (EPS: PKR 0.76). Our estimated earnings are57% higher than the that in the corresponding period last year because we expect the company’s manufacturing cost to decline owing to resumption of line 2 operations in the mid of 2QFY18.After revising our valuation assumptions, including expected cement prices, we have revised our target price for December-18 to PKR 38/share from our previous target price of PKR44/share. Our new target price for December-18 offers an upside of 24% to FCCL’s last closing share price; hence, we are maintaining our positive stance on the scrip.
Fauji Cement is engaged in the manufacturing and marketing of cement.
Ismail Iqbal Securities (Private) Limited (IISPL) is a TREC holder of the Pakistan Stock Exchange, as well as an SECP registered Underwriter and Book Runner. IISPL provides comprehensive financial services including Equity Sales, Research on Equities and the Macro-Economy, Investment Advisory, Portfolio Management, Corporate Finance, and extensive services for Private Equity investors. IISPL services a diversified client base, from Institutional to Retail Investors including High Net worth Individuals.
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