LAHORE, Nishat Chunian Limited (NCL) has unveiled its financial results for the first quarter of FY24, reflecting a 13% quarter-on-quarter increase in Profit After Tax (PAT), attributed mainly to a pronounced surge in the company’s topline and stable gross margins.
According to AKD Securities Limited, NCL’s PAT for 1QFY24 stood at PkR0.5bn (EPS: PkR2.1). This compares favourably with the PkR0.4bn (EPS: PkR1.9) profit registered in the preceding quarter. The topline for the reviewed quarter reached PkR24.2bn, marking a significant growth of 18% from the previous quarter and 59% from the same period last year. The boost is believed to stem from heightened export sales and the depreciation of the Pakistani Rupee.
However, the gross margins remained consistent, registering 13.7%, only slightly lower than the 14.1% recorded in the earlier quarter. Analysts speculate that this steadiness in margins could be a result of higher energy and fuel costs being counterbalanced by drops in cotton prices.
On the expenditure front, distribution expenses saw a rise of 13%, amounting to PkR482mn, up from PkR425mn in the previous quarter. This uptick is presumably linked to augmented freight charges, influenced by soaring fuel prices. In contrast, administrative expenses witnessed a decline of 29%, tallying up to PkR106mn, a drop from the PkR149mn recorded in 4QFY23.
The finance cost for the quarter also escalated, coming in at PkR2.0bn as opposed to the PkR1.6bn in 4QFY23, reflecting a 22% quarter-on-quarter increase. This rise is likely attributed to a surge in short-term borrowings amidst a liquidity squeeze in the composites sector, coupled with an elevated effective interest rate.
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