Nishat Chunian Ltd: Improving textile earnings and coal power plant - Initiate with BUY - By Insight Research

<p></p><ul><li><span style="font-size:medium;">Nishat Chunian Limited (NCL PA) has managed to post 7% annual revenue CAGR in last 3 years despite tough textile fundamentals where sales of other major players remained stagnant. Now that the indicators are moving towards positive direction with better yarn and home textile prices, we expect 31% profits CAGR in next three years. Here, investment in energy projects and availability of low cost local and Indian cotton would ensure margins accretion.</span></li></ul><ul><li><span style="font-size:medium;">Our investment thesis is based on, i) better yarn &amp; home textile prices, ii) upcoming new coal fired power plant (NC electric) providing cost savings and dividend income of PKR1.4/share from Apr. 2017, iii) launch of 1st retail brand &ldquo;The linen company&rdquo; to enhance loca...