Nishat Chunian Limited (NCL) announced its FY24 results today, where the company posted an unconsolidated NPAT of PkR692mn (EPS: PkR2.9), compared to a loss of PkR999mn (LPS: PkR4.2) in the preceding year. In 4QFY24, earnings clocked in at PkR705mn (EPS: PkR2.9), compared to PkR448mn (EPS: PkR1.9) in SPLY, remaining flat YoY, as the impact of lower gross margins was largely offset by increased sales. Earnings surpassed our expectations of PkR1.9/sh, mainly due to a tax reversal in the final quarter and slightly higher-than-expected gross margins.

• Total revenue in 4QFY24 clocked in at PkR20.2bn, down 1%YoY from PkR20.5bn in SPLY. The said decline was mainly due to lower international selling prices and a 3% appreciation of PkR against the greenback, while volume growth remained muted.
• Gross margins for the quarter contracted by 2.1pps, clocking in at 12.1% compared to 14.1% in SPLY, impacted by lower selling prices and elevated energy costs.
• Distribution expenses fell by 1%YoY to PkR420mn, attributed to lower exports volumes, despite higher transportation charges.
• Company recorded a tax reversal of PkR273mn, taking full-year taxation to PkR552mn, down 39%YoY from PkR912mn in FY23.
• We have a ‘Neutral’ stance on the script with Jun’25 target price of PkR27/sh.