Topline Securities Limited - Nishat Mills (NML): 2QFY19 EPS Rs6.27, flat YoY (+37% QoQ); (In line with expectations)

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Topline Securities Limited

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Nishat Mills (NML): 2QFY19 EPS Rs6.27, flat YoY (+37% QoQ); (In line with expectations)

Nishat Mills Limited (NML) posted consolidated earnings flat YoY of Rs6.3/share, broadly in line with our assumption. Company’s performance remained flat despite 14% YoY revenue growth in overall business (textile revenues up 21% YoY) as its finance cost witnessed sharp rise of 63% YoY to Rs684mn, while same cost for its textile sector nearly doubled to Rs444mn in 2QFY19 amidst higher debt borrowing. Borrowing in textile business surged due to blockage of rebates receivables.
Textile gross margins surged 2ppts YoY to 11.8% due to rupee deval. On sequential basis, GP margin is down by one percentage point.
NML’s associates earnings were down by 50% YoY during 1HFY19 due to lower profit YoY posted by DG Khan Cement (DGKC) amidst rising input cost and weak local demand.
Key Risks associated to NML are 1) poor cotton crop, 2) increase in regulatory duties on imported raw material & 3) commodity volatility.

26/02/2019 5 EN

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Topline Securities Limited

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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Nishat Mills (NML): 2QFY19 EPS Rs6.27, flat YoY (+37% QoQ); (In line with expectations)

Pakistan Strategy: Foreign selling at PSX; Will this trend continue in 2021?

Pakistan Strategy: Pakistan Outlook 2021 based on Topline Poll

Pakistan Automobiles: Car sales (including KIA) up ~63% YoY in Nov-2020

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