Topline Flash Note: Nishat Mills Limited (NML): Conference Call takeaways
- Nishat Mills Limited (NML) has 242,832 Spindles, 3,000 Roters and 790 looms in Spinning and Weaving segments. In dyeing, the company has 3 thermosol machines and in garments 1,661 stitching machines.
- Currently towel manufacturing capacity is 10 tons/day. Eventually, this capacity will go up to 30 tons/day by Jul-2021.
- Orders are being diverted to countries like India, Pakistan and Bangladesh due to US China trade war. Order book of the company is full till Mar-2021.
- Management expects 10-20% growth in order flows during the year, or six months orders to be filled within five months.
- Garments demand will resume/rebound as COVID-19 dissipate. Afterwards, Home Textiles will again be a smaller portion like earlier.
- As per management, towel manufacturers in Pakistan are running at full utilization.
- Processed cloths and Grey cloths contributes 28% to total sales each followed by Madeups, Yarn and Garments to the extent of 18%, 15% and 11% respectively.
- Yarn margins would be better as imports of yarn in country are lower particularly from India.
- Management targets 16-20% gross margins in Towel segment with high single digit net margins.
- The company has already procured 70% of its cotton requirement, while around 33% of the cotton used in production will be imported.
- Company uses mix of gas, Furnace Oil, diesel, steam, solar and coal for power generation.
- Management expects currency to remain stagnant to minor changes till Feb-2021.
Hyundai Nishat will launch two more models between Jan – Jun-2021, where one of them would be in Sedan category.
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.
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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