NPAT is expected to be PKR 1.39 Billion with an EPS of PKR 5.50 per shareNishat Mills Ltd. (NISM) scheduled to announce its annual result for FY09 on August 25, 2009. I anticipate that the company will post its NPAT of PKR 1.39 Billion in FY09 compare to PKR 6.14 Billion last year; therefore a decline of 77%YoY. This will result into an EPS of PKR 5.50 in FY09 against the EPS of PKR 25.32 during last year.
Better performance in Core Operation than FY08
The outshine performance in FY08 was in result of a capital gain of PKR 5.1 Billion from the mark-to-market transaction of its ‘other investment’ in MCB after the 20% acquisition by MayBank in MCB.
Apart from this capital gain transaction, NISM actually achieved an EPS of PKR 4.45 per share in FY08 and the marked growth for FY09 would be of 33.7%YoY.
NISM’s anticipations to FY09
The company itself targeted their NPAT to reach at PKR 7.55 Billion or 22.9%YoY growth after the termination of antidumping duty on bed linen by the European Union in the beginning of 3QCY09.
The company’s revenues were also estimated to be assisted by a decrease in PKR-USD Parity over in last 18 months. The NISM anticipated that their Gross Profit will reach to 19% in FY09 compare to 15% last year as the company gained a benefit of procuring the annual cotton requirement in the months of October and December which are known as the key buying season.
Looking Forward
Based on the 12 months stock performance of the company I recommend to ‘buy’ NML scrip where the target price for FY10 is PKR 45 per share.
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