International Steel Limited (ISL): 4QFY20 EPS at Rs1.3, up 61% YoY (In line with industry expectations)
- International Steels Limited (ISL) for 1QFY21 has posted an EPS of Rs1.3, up 61% YoY – inline with ours and market expectations.
- The increase in profitability came in due to increase in Net Sales by 36% YoY and decline in Finance Cost by 61% YoY.
- Net sales increased primarily on the back of higher volumetric sales along with increase in flat steel prices.
- Gross margins clocked in at 8.9% in 1QFY20 vs. 10.7% in 1QFY20 due to the impact of PKR depreciation. However, margins improved by 41bps QoQ from 8.5% in 4QFY20 possibly due non-accrual of GIDC from Aug-2020 onwards.
- Finance Cost declined by 61% YoY due to significant decline in interest rates (policy rate down 625bps).
- Other expenses increased by 182% YoY due to higher allocation towards WPPF/WWF, which is in line with its profitability trend.
- Effective tax rate during the quarter clocked in at 35% against reversal of Rs47mn and Rs62mn in both 1QFY20 and 4QFY20.
International Steels Limited is a producer of flat steel products. The Company manufactures cold rolled steel coils, galvanized coils and color coated steel. Its cold rolled steel is available in thicknesses ranging from 0.25 millimeter (mm) to 3.0 mm; galvanized steel is available in thicknesses of 0.25 mm to 2.0 mm, and color coated steel is available in thickness range of 0.20 to 1.50 mm. Its rolling capacity is 500,000 metric tons (MT). It produces approximately 400,000 MT of galvanized products. It produces color coated sheets on various substrates, including cold rolled, galvanized, galvalume, aluminum and stainless steel sheets. Its cold rolled steel offers applications, such as ceiling lights, tube lights, ceiling fans, oil drums, lube drums and motor cycle frame; galvanized steel has applications, such as packaging, furniture, washing machines, gas ovens and microwave ovens, and color coated steel offers applications, such as ice boxes, tubs, buckets and storage bins.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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