In our today’s morning briefing we would discuss the performance of Fauji Cement Company Limited (FCCL) in 1HFY15 and would give recommendation to the investors.

PAT climbs 33% YoY in 1HFY15: Primarily on back of higher sales volume and cement prices along with decline in finance cost, the cumulative profit after taxation (PAT) of FCCL reached Rs 1,668 million (EPS: Rs1.25) in 1HFY15 resulting in a 33% YoY growth when compared to a PAT of Rs 1,251 million (EPS: Rs 0.94) in 1HFY14. In addition to above mentioned factors, the bottom-line was also boosted by rise in other income.

More significant growth in 2QFY15: The company posted gigantic growth in earning in 2QFY15 alone where the company’s PAT totaled Rs 1,066 million (EPS: Rs 0.80) which is 59% YoY up when compared to a PAT of Rs 669 million (EPS: Rs 0.50) in 2QFY14. This impressive growth in earning was on back of increased prices, higher volumetric sales, and lower finance cost. The finance cost of the company reduced owing to declining interest rates. The corporate results were accompanied with a first interim cash dividend of Rs 1/share.

Top-line hikes on better prices and volume:  With the support of 7% YoY rise in local cement prices and 6% YoY hike in volumetric sales, the net revenue of the company reached Rs 8,991 million in 1HFY15 increasing by 9% YoY as against net revenue of Rs 8,237 million in 1HFY14. The cost of sales surge by 7% YoY in 1HFY15 to Rs 5,823 million versus Rs 5,460 million in the identical period in FY14. Therefore the gross profit of the company climbed to Rs 3,168 million in 1HFY15 growing by 14% YoY from a gross profit of Rs 2,777 million in 1HFY14. The gross profit margin in 1HFY15 reached 35.2% versus 33.7% in the similar period in FY14.