Pakistan Textiles: Decline in non-value dragging overall exports

Pakistan Textiles: Decline in non-value dragging overall exports

 

Textile exports continued their downtrend in the month of Apr’15 as 10MFY15 exports declined by 1.4%YoY to clock in at USD11.3bn from USD11.5bn in similar period last year. While on MOM basis, the total exports reported a growth of 4.6% to USD1.1bn from USD1.03bn clocked in the last month. Going forward, we expect the country’s total textile exports to remain flattish at ~USD14bn during the outgoing FY15. While on the budgetary front, the recommended hike on duty of textile exports (from 2%-5%)
bodes negative for the sector and will likely hamper the competitiveness of Pakistani exports in the international market. The recently approved Gas Infrastructure Development CESS Ordinance, 2015 (with few amendments) is likely to have mixed impact on the bottom-line of the companies in BMA textile universe (GATM the most affected). We highlight NML as our top pick from textile sector with a TP of PKR149/sh, offering 45% returns on last closing.

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Report by:

Jehanzaib Zafar

 

BMA Capital Management Ltd.

(9221) 111 262 111

 

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