JS Securities Limited – DGKC: 1HFY15 EPS at Rs7.75, up 27% YoY

Karachi, February 17, 2015 (PPI-OT): DG Khan Cement (DGKC) announced 1HFY15 results today, where the company posted earnings of Rs3,394mn (EPS: Rs7.75), up 27% YoY. In 2Q alone, earnings clocked in at Rs5.10/share, a growth of 40% YoY/ 93% QoQ.

Earnings are better than JS Securities Limited’s and street estimates led by lower than expected (1) Other expenses, (2) tax rate clocking in at ~9% vis-a-vis JS Securities Limited’s expectation of ~23% and (3) higher than expected other income at Rs697mn (EPS contribution Rs1.43) relative to JS Securities Limited’s estimate of Rs554mn. Sales revenue and gross margin remained in-line with JS Securities Limited’s expectations. JS Securities Limited maintains ‘Buy’ stance on the stock with a Target Price of Rs155/share.