FCCL cash payout to keep the ball rolling – SCS Research
By: Nabeel Khursheed,
Standard Capital Securities (Pvt) Ltd
FCCL is currently offering an attractive upside potential of 19% from our Jun-FY14 target price of Rs 20, based on our base case scenario.
We expect FCCL to post 3QFY14 EPS of Re 0.72, up 47.5% YoY, translating into an expected cash payout of Re 0.67. Top-line in 3QFY14 is expected to boost by 61.8% YoY, mainly due to the exponential uptick in cement price in the current financial year.
Management has been working on to reduce FCCL’s reliance on the National grid by taking up Alternate Energy Source initiative, the effect of which is expected to come online in FY15, thereby contributing positively to the bottom-line going forward.
Exchange Rate Impact
Recent currency appreciation would further enhance the company’s ability to manage its remaining debt outstanding, thereby improving the interest coverage ratio in 4QFY14.