Interloop Limited’s (ILP) board is scheduled to announce its 2QFY22 result on January 26th, 2022. We expect the company to a post a profit after tax (PAT) of PKR 3,016mn (EPS: PKR 3.36), up by 98% YoY. Topline of the company is expected to grow by 59% YoY to PKR 21.2bn due to i) utilization of hosiery division at nearly 100%, ii) higher utilization of the denim plant, iii) continuous jump in selling prices of hosiery, iv) currency depreciation, and v) addition of new machineries in the hosiery division. While gross margins are expected to increase by 351bps YoY to 28.7% during 2QFY22 owing to higher margins of spinning and hosiery segment along with procurement of raw material at cheaper rates. Finance cost is expected to arrive at PKR 388mn, up by 33% YoY due to surge in borrowings to meet working capital requirement. Along with the result, we expect the company to announce an interim cash dividend of PKR 2.50/share.

Courtesy – AHL Research