NML grows despite falling textile exports

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Nishat Mills Limited (NML) posted its annual results on Monday, February 20, 2017 and declared 2pc growth in performance despite the pressures on the textile sector exports.

According to the AKD Research report, much of this growth can be attributed to the company’s value-added textile segment. The report called the results below expectations and mentioned the reduction in gross margin by 2.18pc, coming to be 10.98pc on a year over year basis. This is explained by the 26pc jump in the cotton prices that reduced the advantage gained by the inclusion in zero tax regime. Other income also increased for the company, by 15pc on a year over year basis and amounted to Rs 2.59 billion.

The associate companies paid strong dividends over the time period mentioned and the company also posted decreased finance cost primarily owing to the low-interest rate environment. The report also said, “NML has gained 17% CYTD on being a key beneficiary of the textile incentive package and potential diversification into the Auto space. Consequently, our TP of PkR185.3/share for the scrip now implies a limited upside of 3.6% from current levels.”