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THCCL - Thatta Cement Company Limited

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Aba Ali Habib Research

18 April 2017

 

THCCL: 9MFY17 EPS to clock in at PKR 5.55, up by 29% YoY

 

  • THCCL is scheduled to announce its 3QFY17 results, we expect company to post 3QFY17 EPS at PKR 1.64 as compared to PKR 1.30 in SPLY, up by 26% YoY. Cumulative 9M EPS is likely to depict growth of 29% YoY to PKR 5.55 against PKR 4.31 primarily on back of advancement in GMs by 3.5pps and rise in cement & clinker dispatches by 52.1% YoY.
  • During 9MFY17, Finance cost of the company is expected to fell by 19% YoY primarily on back of decline in long term financing by 45% YoY. Moreover, company is unlikely to announce any dividend for FY17.
  • Clinker & Cement capacity in 3QFY17 is expected to hover around 110% & 92% compared to 104% and 80.7% in 2QFY17.
  • We maintain our “BUY” recommendation on this scrip with Dec-17 PT of PKR 56.1/share, offering an impressive upside of 23.3% from LDCP.

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THCCL Preview: FY17E estimated at PKR 6.34, marginally up by 2.8% YoY

  • THCCL’s board meeting for FY17E results is scheduled on 19th August, where PAT of the company is estimated at PKR 632mn (EPS: PKR 6.34), marginally up by 2.8% YoY from PKR 614mn (EPS: PKR 6.16) in FY16. Rise in coal prices by ~45.2% Y is likely to trim gross margins by 1.1pps YoY to 31.0% compared to 32.1% in FY16.
  • Net sales of the company is expected to witness growth of 26.5% YoY to PKR 3.60bn compared to PKR 2.84bn in FY16, mainly on back of anticipated rise in cement dispatches by 20.0% YoY. However, selling & distribution and admin expenses are likely to advance by 31.2%/35.7% YoY respectively.
  • For 4QFY17 PAT of the company is forecasted at PKR 81.8mn, as against PKR 184.6mn in SPLY, down by 55.7% YoY owing to dip in gross margins by 10.4pps to 26.5% against 36.8% in SPLY.
  • We expect company to announce final cash dividend of PKR 1.5/share.
  • We maintain our BUY recommendation on THCCL based on June-18 TP of PKR 51.5/share, implying a potential upside of 40.8% from last day closing price.

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Aba Ali Habib Research

21 August 2017

 

THCCL Review: Fell in other income and higher effective tax rate dragged EPS to PKR 0.32 during 4QFY17

  • THCCL disclosed its FY17 results, where PAT of the company clocked in at PKR 582mn (EPS: PKR 5.84) compared to 614mn (EPS: PKR 6.16) in FY16, down by 5.29% YoY. The result is below our expectations of PKR 632mn (EPS: PKR 6.34) mainly due to decline in other income by 26.6% YoY. 9MFY17 other income was PKR 133.8mn, which has reduced to PKR 84mn in FY17 owing to loss booked by the company on its available for sale investment.
  • In line with our expectations, net sales of the company clocked in at PKR 3.65bn in FY17 against PKR 2.8bn in FY16, up by 28.5% YoY primarily due to higher cement dispatches.
  • For FY17 Gross margins of the company reported at 31.8% against our expectation of 31.0% (FY17) and 32.1% in FY16, up by 80bps/down by 30bps YoY.
  • During 4QFY17, company reported EPS of PKR 0.32, down by 82.5% YoY from PKR 1.85 in SPLY mainly due to fell in other income by 8.01x YoY and a higher effective tax rate of 69.8% against 18.0% in 4QFY16.
  • Company announced final cash dividend of PKR 2.35 per share, which is in line with Finance act clause of 40% Payout ratio.
  • We maintain our BUY recommendation on THCCL based on June-18 TP of PKR 51.5/share, implying a potential upside of 32.1% from last day closing price.

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Thatta Cement Company Limited

(THCCL)

 

August 21st, 2017

 

FINANCIAL RESULT FOR THE YEAR ENDED 30/06/2017

(UNCONSOLIDATED) PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 855.306

(UNCONSOLIDATED) PROFIT/LOSS AFTER TAXATION RS. IN MILLION 581.993

(UNCONSOLIDATED) EPS = 5.84

(CONSOLIDATED) PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 993.210

(CONSOLIDATED) PROFIT/LOSS AFTER TAXATION RS. IN MILLION 718.781

(CONSOLIDATED) EPS = 6.69

DIVIDEND = 23.50%

ANNUAL GENERAL MEETING WILL BE HELD ON 18/09/2017

BOOK CLOSURE FROM 11/09/2017

BOOK CLOSURE TO 18/09/2017

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