NBP likely to report Rs 13.3b profit after tax

Following the general performance of the banking sector in current environment, the National Bank of Pakistan is expected to show a growth of 16%YoY in its bottom line by reporting after tax profit of Rs13.3bn for 9MCY12 against a profit after tax of Rs11.4bn in 9MCY11.
This translates into EPS of Rs7.17.
“This significant increase in earnings is due to higher non-interest income that is anticipated to grow by 33%YoY along with decline in provisioning of 17%,” said the analysts at InvestCap Research.
The non-interest expense is expected to rise by 13%YoY. However, Net interest income (NII) of the bank is expected to decline by 4%YoY from Rs33bn in 9MCY11 to Rs32bn in 9MCY12.
Fee, commission, brokerage income and dividend income are expected to remain major supporter for the bottomline of the bank and are foresee to grow by 6%YoY and 135%YoY respectively. On sequential basis, NBP is expected to post after tax profit of Rs5.07bn (EPS: Rs2.74) for 3QCY12 as against the PAT of Rs3.3bn reported during the same period of last year, translating into a growth of 53%YoY. Currently NBP trades at CY12 PBV and P/E of 0.61x and 4.32x respectively and we recommended ‘Buy’ stance with Dec-12 target price of Rs65/shares.
Nishat Mills Limited (NML) is scheduled to announce its first quarter fiscal year 2013 results on Thursday, 25th Oct-12. NML is expected to post PAT of Rs1.1bn (EPS Rs3.06) in 1QFY13 as compared to Rs1.0bn (EPS Rs2.93) in 1QFY12, posting a modest growth of 4.5%YoY in the bottomline. The increase in bottomline is expected on the back of improving gross margins as low cotton prices on local front are expected to improve margins of different value added products during 1QFY13. We expect gross margins to clock in at 17% in 1QFY13 as against 10.7% in same period last year. Likewise, 8.9%YoY depreciation in PKR against USD is likely to help the company in improving its export sales’ margins. Furthermore, dividend income from MCB and PakGen power is anticipated to add significant amount to the other income head coupled with low financial charges due to decline in working capital requirements. With Dec-12 TP of Rs65/share on SOTP basis, we recommend ‘Hold’ on NML. The company is currently trading at PE ratio of 6.4x with dividend yield of 6.3% on FY13 earning expectations.

Lucky Cement Company (LUCK) is scheduled to announce its quarterly accounts for the first quarter of fiscal year 2013 onThursday, October 25, 2012. We expect the company to post profit after tax (PAT) of Rs2,201mn (bottomline up by massive 46%YoY), translating into EPS of Rs6.81. The phenomenal rise witnessed in the bottomline of the company is to be primarily supported by handsome 7%YoY escalation in the retention price of the commodity coupled with expectation of attractive 13%YoY volumetric growth in the company’s dispatches. Positivity is seen to be further supported by 28%YoY dip in the global coal prices that in effect are foreseen to have enhanced gross margins of the company. The gross margins during the period under review are expected to be bolstered by 2pps in comparison against the corresponding period previous year.
We have ‘Buy’ recommendation on LUCK, as currently the share is offering potential upside of colossal ~28% against our per share target price of Rs179.