JS Securities Limited – LUCK: 1HFY15 EPS at Rs17.32, up 9% YoY

Karachi, February 23, 2015 (PPI-OT): Lucky Cement (LUCK) announced 1HFY15 results today, where the company posted earnings of Rs5,601mn (EPS: Rs17.32), up 9% YoY.

In 2Q alone, earnings clocked in at Rs9.07/share, a growth of 12% YoY/ 10% QoQ. Earnings are slightly lower than JS Securities Limited’s estimates, as gross margins clocked in at 44% vis-à-vis JS Securities Limited’s expectation of 46%.

Sales revenue in 2QFY15 grew by 7% YoY on the back of 4% YoY higher dispatches and change in sales mix to higher priced domestic market, while cost of sales increased by just 3% YoY because of depressed international coal prices. This resulted in gross margin expansion by ~200bp.

Our preference for LUCK remains intact, where JS Securities Limited reiterates JS Securities Limited’s ‘Buy’ rating with a Target Price of Rs635.