The document discusses the financial performance of NML from FY2013-2017. It notes that while NML's equity and non-current assets grew substantially in this period, its sales decreased in some years due to market instability and competition. However, the company's z-score improved, indicating it is in good financial health. The document concludes that NML's shares are undervalued currently and recommends buying them for long-term investment due to the company's stable dividend payments and manageable debt levels.
The document discusses the financial performance of NML from FY2013-2017. It notes that while NML's equity and non-current assets grew substantially in this period, its sales decreased in some years due to market instability and competition. However, the company's z-score improved, indicating it is in good financial health. The document concludes that NML's shares are undervalued currently and recommends buying them for long-term investment due to the company's stable dividend payments and manageable debt levels.
The document discusses the financial performance of NML from FY2013-2017. It notes that while NML's equity and non-current assets grew substantially in this period, its sales decreased in some years due to market instability and competition. However, the company's z-score improved, indicating it is in good financial health. The document concludes that NML's shares are undervalued currently and recommends buying them for long-term investment due to the company's stable dividend payments and manageable debt levels.
NML is expected to grow steadily YoY. In FY 2013 they make the
policy to construct the new spinning unit to increase the production. So in FY 2014 the company gives the 32.41% dividend to its shareholders as compared to previous year to increase their capital gain. But their sales are shrinking in FY2015-16 respectively due to the instability in the market price in cotton, fuel and labor respectively. But from FY2013-17 the equity grows to 250% to PKR 88,162 Million and non-current assets by 240% to PKR 88,532 Million which will help to boost in recent years. As the company is more focus into their associated companies as well. The main reason of downward trend in their profit is that their sales are decreasing due to severe competition, higher rate of dollar and low demand of textile products and their EPS becomes steady. The company receives the good return on the investments over the years. As the company have the 3% market share of textile. In term of debt the company is very good as compared to FY2014 where the company took some loan to invest. The company is position to take the loan and it can easily repay it. But we compare ROA and ROE from FY 2013-17 it take to much gap that the company is increasing its assets but the return on them is slow due to the cost incurred on it as compared to the equity is showing the response in a good manner. As per Z-Score analysis the company total score moved from 8.49 to 10.90 from FY2013-17 this shows that the company is in very good situation and it shows the positive impact to its stakeholders as their market capitalization reaches to Rs48 Billion as compared to their liability which is low as compared to its assets. The company is given the dividend every year. So according to it the company is in no state of bankruptcy. AS per analysis of the stock valuation came out to be is Rs 80.16 but the current price of this stock is Rs 167.65, we see our stock price is undervalue. So in this case we should buy our stock so that we can earn the profits. But if we see the growth rate from FY2013-17 is not as good. As per horizontal and vertical analysis of the company their net profit is not shows the continuous good trend as the company is installing the new unit and not making the sales according to it and the expenses are growing YoY basis. So the company should definitely work on them to increase the profitability. On the other hand the assets and shareholders’ equity shows good trend. According to my opinion we should buy this share because the statements of this company are better and they give their dividends on time. And the company is not having so much huge debts that they cannot pay it off.So it can be bought for the long term investments purpose.