By: Azee Securities Private Limited
Fecto Cement Company Limited (FECTC) is scheduled to announce its result on February 24, 2015 for 1HFY15, following are the details.
Earnings momentum to carry on: We anticipate Fecto cement to post decent earnings growth of 19% as profit after tax to surge at Rs 376 million which translates into EPS of Rs 7.49 in 1HFY15 against Rs 317 million (EPS: Rs 6.32) in 1HFY14. Increase in growth expected due to better cement prices, hike in volumetric growth, fall in coal prices and lower financing cost. Similarly, in 2QFY15, we expect Fecto to witness earning growth of 29% YoY to Rs 213 million (EPS: Rs 4.24) in 2QFY15 against Rs 164 million (EPS: Rs 3.27) in 2QFY14 due to higher retention prices and increase in cement dispatches. Furthermore, we expect company to announce cash dividend of Rs 1.5/share.
Net sales to hike 3%: Net sales of the company is expected to hike by 3% YoY to Rs 2.39 billion in 1HFY15 compared to Rs 2.32 billion in 1HFY14 mainly due to higher volumetric sales and increase in cement prices. We expect the volumetric sales of the company to surge by 3% YoY to 348k tons in 1HFY15 against 340k tons in 1HFY14 due to higher domestic sales which rises by 9% in 1HFY15. Cost of sales is expected to decline by 4% to Rs 1.62 billion in 1HFY15 against Rs 1.68 billion in 1HFY14 due to lower coal prices.
Gross profit likely to up 20%: Gross profit is expected to increase by 20% to Rs 773 million compared to Rs 647 million in 1HFY14 owing to higher retention prices. Gross profit margin is expected to surge to 32.3% in 1HFY15 against 28% in 1HFY14.