reports
- IMS Research Team
Gul Ahmed Textile Mills Ltd: 3QFY23 Review - Earnings beat on higher g...
Gul Ahmed Textiles Mills (GATM) has reported consolidated NPAT of PKR1.1bn (EPS: PKR1.82) for 3QFY23, up 35% QoQ but down 54% YoY, profits are slightly higher than our expected EPS of PKR1.67, with deviation stemming from higher GMs and lower-than-estimated finance costs. This takes 9MFY23 consolidated NPAT to PKR3.3bn (EPS: PKR5.36), down 46% YoY. KEY HIGHLIGHTS FOR 3QFY23 RESULT INCLUDE: * Revenue clocked in at PKR37.7bn, up 24% QoQ and 44% YoY. The increase in revenue is primarily attribu...
- IMS Research Team
Gul Ahmed Textile Mills Ltd: 2QFY23 Review - Higher COGS and tax rates...
Gul Ahmed Textile Mills (GATM) has reported consolidated NPAT of PKR0.8bn (EPS: PKR1.35) for 2QFY23, down 65% YoY and 38% QoQ. Increase in COGS, lower demand and higher tax rate led to the reduction in profits. This takes 1HFY23 NPAT to PKR2.2bn (EPS: PKR3.53), down 42% YoY. Key highlights for 2QFY23 result: * Revenue clocked in at PKR30.4bn, down 5% YoY and 4% QoQ. The slowdown in revenue is primarily attributable to higher inflation in local and major exporting destinations, which translat...
- Abdul Ghani Mianoor
Gul Ahmed Textile Mills Ltd: 1QFY23 Review - Lower retail segment sale...
Gul Ahmed Textile Mills (GATM) has reported consolidated NPAT of PKR1.3bn (EPS: PKR2.19) for 1QFY23, up 16% YoY, but down a sharp 65% QoQ. The 1Q result missed our EPS estimate of PKR4.81 by some distance, owing to lower revenues and higher Opex compared to expectations. Key highlights for 1QFY23: * Revenues have clocked in at PKR31.7bn, up 29% YoY but are down 18% QoQ, lower than our estimate of PKR37.0bn. According to channel checks, the YoY rise in revenues is due to the strong order flow...
- Abdul Ghani Mianoor
Pakistan Textiles: Attractive valuations offset the headwinds
* Despite the sharp downward revision in our target prices for the IMS Textile Universe, by 22% on average, we remain Overweight on the sector. The government’s policy of providing regionally competitive utility prices is vulnerable under the IMF program and global demand fares challenges, but valuations are already knocked down. * Global and local macroeconomic uncertainties have led us to further prune our revenue and earnings growth assumptions for FY23-24f by 1%/12%, respectively, f...
- Abdul Ghani Mianoor
Pakistan Textile exports dwindle during Sep’22
Recent monthly textile exports of USD1.5bn indicate a modest slowdown in growth to 3% YoY (down 3% MoM), significantly lower than the growth witnessed in Sep’21. The slowdown in exports is largely due to possible slowdown in demand, owing to piling up of inventories ahead of winters. However, headwinds remain at large, in terms of, i) sobering demand from global slowdown, ii) volatility in cotton prices, iii) higher operating costs and iv) import restrictions by SBP. However, we continue to r...
- Abdul Ghani Mianoor
1QFY23 Result Previews - Moderating gross margins to offset sharp reve...
* We expect the IMS Textile Universe to post combined core net profits of PKR9.4bn in 1QFY23, flat compared to SPLY, largely owing to moderating cotton inventory gains and elevated borrowing costs, offsetting the 34% YoY combined revenue growth. * Once again, ILP and GATM are expected to lead our Textile cluster, largely attributed to robust revenue growth in the Value-added segments, continued exchange gains and operational efficiencies. * Sequentially, the significant improvement...
- Abdul Ghani Mianoor
Pakistan Textiles sector update
GOVERNMENT PROPOSES DISCONTINUATION OF SUBSIDIZED ELECTRICITY RATE Latest news articles suggest that the government is proposing to discontinue the electricity tariff incentives from the current USD0.09/KwH (PKR21/KwH) to USD0.19/KwH (PKR43.45). Although the move will contradict the government’s plans on encouraging the sector to shift to the grid, away from gas-based CPPs, the sector’s competitiveness and profitability is likely to be hampered, in our view. It can be assumed that the propos...
- Abdul Ghani Mianoor
Gul Ahmed Textile Mills Ltd: 4QFY22 Review - Healthy revenue growth le...
Gul Ahmed Textile Mills (GATM) has reported consolidated NPAT of PKR3.9bn (EPS: PKR6.26) for 4QFY22, more than double compared to last year and up 58% QoQ. This takes FY22 NPAT to an all-time high of PKR9.8bn (EPS: PKR15.96), up 87% YoY. The 4Q result significantly beat our EPS estimate of PKR3.34, owing to greater revenue and a lower effective tax rate. However, GATM skipped out on a payout in FY22, against our PKR2.5/sh expectation, owing to i) expectations of a decline in profitability in ...
- Abdul Ghani Mianoor
Pakistan Textiles: Export rise in Aug’22 amid normalized production
Latest Textile exports print of USD1.58bn indicates an uptick in growth of 8% YoY (+6% MoM), while it remains lower than that of Aug’21 (distorted due to resumption of activities in Aug’20 from the Covid-19 lockdown). Sequentially, the growth is largely due to pent-up production following resumption of utilities and lack of holidays. Despite the recovery in growth, headwinds remain at large, in terms of, i) sobering demand from global slowdown, which has reportedly resulted in the shutting do...
- Abdul Ghani Mianoor
Pakistan Textiles: Core-profits are intact, but FY23 to be challenging
* We expect our Textile Universe to post combined core net profits of PKR7.9bn in 4QFY22, down 8% YoY largely owing to one-off supertax and increased borrowing costs, which are likely to offset strong revenue growth and exchange gains. * In terms of core profits, both ILP and GATM are expected to lead our Textile cluster, largely attributed to strong Spinning and Value-added margins (latter especially in case of ILP). * Despite record exports in 4Q, the Textile sector significantly...
- Abdul Ghani Mianoor
Pakistan Textiles: Exports witness highest slump since Feb’21; headwin...
Latest Textile exports print of USD1.48bn indicates a slowdown in growth to a mere 1% YoY (down 13% MoM), lowest growth since Feb’21. Inadequate energy availability (first week) and less than optimal supply during the remainder of the month, Eid holidays, as well as monsoon rain led to the sharp slowdown. Although exports are likely to improve in the ongoing month, headwinds remain at large, in terms of, i) sobering demand from global slowdown, ii) volatility in cotton prices due to PKR and w...
- Abdul Ghani Mianoor
Pakistan Textiles – June 2022: Record FY22 but headwinds loom
Pakistan’s textile exports reached USD 1.7bn during Jun’22, taking annual textile exports to a record high of USD 19.3bn (+25% YoY). Apart from increased summer demand and adequate energy availability, most of it was driven by the increased competitiveness of Pakistan’s total exports which also hit the highest level of USD 31.8bn (+26% YoY). However, macro headwinds loom at large, in terms of, i) sobering demand from the global slowdown, ii) sharp decline in cotton prices, and iii) higher ene...
- Abdul Ghani Mianoor
Gul Ahmed Textile Mills Ltd: Corporate Briefing Takeaways
GATM held its Corporate Briefing Session today to discuss the recent performance and the future outlook. During FY22TD, GATM posted a sharp 72% yoy rise in 9MFY22 earnings to PKR6.2bn (EPS: PKR10.01). Despite the imposition of super-tax, GATM is likely to post an all-time high EPS of PKR12.02 in FY22, in our view; however, demand outlook remains cloudy. KEY TAKEAWAYS Demand Outlook: * With the surge in inflation in US, UK and EU, Pakistan’s exports are expected to witness a decline of 10-15%...
- Abdul Ghani Mianoor
Pakistan Textiles: Sales volume update
MAY'22 - TEXTILE EXPORTS YOY GROWTH SUSTAINED DESPITE ISSUES IN PRODUCTION Textile exports continue to grow sharply, rising by 55% yoy to US$1.6bn, sustaining above the US$1.5bn level since October 2021. Although the robust growth in exports is attributed to orders placed in anticipation of strong summer demand, the sequential decline is due to gas shortages and Eid festivities during the month, in our view. This took 11MFY22 exports to US$17.6bn (up 28% yoy). We expect FY22 textile exports t...
Gul Ahmed Textile: 1 director
A director at Gul Ahmed Textile sold 112,000 shares at 36.250PKR and the significance rating of the trade was 64/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clea...
- Abdul Ghani Mianoor
Pakistan Textiles: April 2022 – Exports clock in at a record high
Pakistan’s total exports in April 2022 clocked in at US$2.9bn (the second highest level in FY22), up a sharp 31% yoy and 4% mom, and sustaining above the US$2.6bn level since November 2021. This took 10MFY22 exports to US$26bn, up 26% yoy. Textile exports led the sharp growth, rising by 30% yoy and 7% mom to US$1.7bn – the highest monthly exports in FY22 – sustaining above the US$1.5bn level since October 2021. This took 10MFY22 exports to US$16.0bn (record 10M total). The robust growth is a ...
- Abdul Ghani Mianoor
Gul Ahmed Textile Mills Ltd: 3QFY22 Review: Healthy GMs lead to rise i...
Gul Ahmed Textile Mills (GATM) has reported consolidated NPAT of PKR2.4bn (EPS: PKR3.96) for 3QFY22, up 43% yoy and 3% qoq. This takes 9MFY22 NPAT to PKR6.0bn (EPS: PKR9.70), up a sharp 66% yoy. The 3Q result is in line with our expected EPS of PKR3.89. KEY HIGHLIGHTS FOR 3QFY22 RESULT: * Revenues have clocked in at PKR26.2bn, up 17% yoy but down 18% qoq. The sharp yoy rise is likely due to the robust Spinning segment order book, coupled with capacity expansions in the Spinning and Home Text...
- Abdul Ghani Mianoor
Pakistan Textiles: Spinning margins to sustain strong yoy profitabilit...
* For 3QFY22 results, we expect our Textile Universe to post combined core net profits of PKR10.8bn, up a strong c.65% yoy on revenue and margin growth, amid a sharp c.25% yoy rise in exports and c.10% PKR devaluation. * In terms of core profits, both KTML and ILP are expected to lead our Textile cluster, largely attributed to strong Spinning and Value-added margins in case of ILP. * We are Overweight on the sector with a Buy rating on all stocks under coverage, where we expect str...
- Abdul Ghani Mianoor
Pakistan Textiles: March 2022 – Strong yoy growth momentum sustained
Pakistan’s total exports in March 2022 clocked in at c.US$2.8bn, up a sharp 18% yoy (though flat mom), sustaining above the US$2.6bn level since November 2021. Textile exports led the sharp growth, rising by 20% yoy, but down 4% mom, to c.US$1.6bn – the third-highest monthly exports in FY22 – sustaining the US$1.5bn level since October 2021. This took 9MFY22 exports to c.US$14bn (record 9M total). The robust growth is a testament to the strong demand for Pakistan’s textiles in the global mark...
- Abdul Ghani Mianoor
Pakistan Textiles: Remain positive even as global headwinds moderate g...
* We believe that the pillars supporting growth for the Pakistani Textile exports remain well-grounded, even as the sector is likely to enter a period of slower growth than in recent years amid global headwinds. * Nonetheless, we have pruned our growth assumptions for revenue and earnings growth in FY23-24f led by normalizing margins. This is driven expectations of muted global growth and softer purchasing power for global consumers amid inflationary pressures world over – which have be...
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