The board of Attock Cement Limited (ACPL) is scheduled to meet on Apr13’15 to discuss the 3QFY15 results. We expect the company to post earnings of PKR677mn (EPS: PKR5.9) in 3QFY15 compared to PKR537mn (EPS: PKR4.7) reported in 3QFY14, posting a growth of 26%YoY. The growth in earnings can primarily be attributed to 3.9% growth in dispatches coupled with 630bps expansion in margins due to YoY higher retention prices in the quarter. On a QoQ basis, earnings are expected to report a growth of 22% backed by i) 6% growth in dispatches and 300bps expansion in margins due to increased share hpw of high margin local sales in total dispatches. Thus, 9MFY15 earnings are expected to clock in at PKR1,700mn (EPS: PKR14.9) as against PKR1,407mn (EPS:PKR12.3) in 9MFY14, up 21%YoY. At our target price of PKR266/sh, the scrip offers a total return of 40% inclusive of 6% dividend yield.

Dispatch growth supporting earnings: The company witnessed a handsome 4%YoY growth in 3QFY15 as exports increased by 15%YoY; however, lower 2%YoY decline in local sales limited the total growth. While, on a QoQ basis, dispatches showed an impressive trend with total dispatches growing 6%QoQ supported by 20%QoQ uptick in local dispatches.