Hifsa Raja

Pakistan Tobacco Company Limited’s net turnover increased 27% to Rs70 billion in the nine months ending September 30, 2022, compared with Rs55 billion in the corresponding period of 2021. A company’s turnover is the total price of the products it sells within a specified period. The rise in net turnover suggests the business sold more in 9MCY22 than in 9MCY21.

The company’s gross profit increased by 31% to Rs35 billion in 9MCY22 from Rs27 billion in 9MCY21. Gross profit is the profit left after paying sales tax and excise duties. The profit-before taxation stood at Rs27 billion in 9MCY22, up 27% from Rs19 billion in 9MCY21. The profit-after taxation increased 18% to Rs16 billion in 9MCY22 from Rs14 billion over the corresponding period of CY21, reports WealthPK.

Earnings growth analysis

The fact that the company’s earnings per share have been rising steadily from 2018 to 2021 is encouraging for investors. A corporation is more appealing as far as investment is concerned when its earnings increase steadily.

Companies registering the biggest increase in their share prices in absolute terms during the period under review were Pakistan Tobacco Company Ltd (Rs39.33), Nestle Pakistan Ltd (Rs249), Siemens Pakistan Engineering Ltd (Rs37.83), Philip Morris Pakistan Ltd (Rs18.75) and Suraj Cotton Mills Ltd (Rs9.50).

Price/earnings (PE) ratio

Pakistan Tobacco Company Limited’s price/earnings (PE) ratio stood at 11 along with market capitaliation of Rs22 billion. In comparison to its rivals, the company appears to be undervalued, which is an opportunity for investors to buy its shares. Investors are drawn to companies with low PE ratios.

Pakistan Tobacco Company and Philip Morris are among the companies using the track and trace system since tobacco companies are no longer permitted to sell cigarettes without tax stamps. 

Company profile

Pakistan Tobacco Company is a public limited company incorporated in Pakistan on November 18, 1947, under the Companies Act, 1913, which has now been replaced with Companies Act, 2017. The company is a subsidiary of British American Tobacco (Investments) Limited, United Kingdom, whereas its ultimate parent company is British American Tobacco, PLC, United Kingdom. The company is engaged in the manufacture and sale of cigarettes/ tobacco.

Credit : Independent News Pakistan-WealthPk