Elixir Securities Limited – Company Report (Detailed)

Karachi, April 19, 2016 (PPI-OT): Tariq Glass Industries Limited Back in Business

Elixir Securities Limited resumes coverage on Tariq Glass Industries Limited (TGL) with Dec-16 PT of PKR120/sh offering an upside of 96% from last closing. TGL is currently trading at an undemanding FY17/18 PE of 6.01x/6.41x.

The company has been able to secure a sizable market share in float segment (~50%) and is set to strengthen its market share in the tableware segment as well on the back of enhanced production capacity and expanding portfolio of value added products.

Going forward, Elixir Securities Limited expects demand for float segment to remain buoyant on the back of economic tailwinds with heightened construction activity to remain the primary demand driver.

Incorporating higher volumetric growth amidst stable margins, Elixir Securities Limited expects the company’s topline and bottom line to grow at a 5-year CAGR of 12% and 14% respectively.

In addition, the company is installing a ~10.5MW FO based power plant to mitigate the risk of power outages coupled with reduce power costs, which is a major portion of COGs (i.e. 15% of COGS on average during last two years). The in-house power generation would be more than sufficient to not only meet the current power requirement for both segments (i.e. ~6MW) but also meet future power requirement of ~8.5MW.

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