Pak Elektron Ltd (PAEL) held its analyst briefing recently to brief about CY21/3QCY22 financial results and the company’s future outlook. To recall, company posted PAT of PkR1.5bn (EPS: PkR1.71) during 3QCY22 vs. PAT of PkR1.37bn (EPS: PkR1.57) SPLY

·         Gross margins during the period stood at 19.4% vs 21.14% for the full year CY21, how ever the increase in bottom line during the nine-month period was majorly attributable to the rise in topline by 28%YoY, as average product price increase stood at ~26% during the nine months (appliances/power division: ↑ 22%/31%).

·         With regards to the ongoing import restrictions, management commented that they are currently operating under a quota regime and are only able to import 40%-50% of the previous year’s volumes

·         Based on our estimates, we expect PAEL to report NPAT PkR1.83bn (EPS:PkR2.14) during the full year CY22.

We have a Dec-23 target price of PkR12/share on the company, offering negligible upside, based on a WACC of at 26% (RF/Rm: 17%/9%) and terminal year of CY27 (terminal growth of 3%)

Courtesy – AKD Research