{"id":5907,"date":"2024-07-30T01:41:49","date_gmt":"2024-07-29T20:41:49","guid":{"rendered":"https:\/\/ksestocks.com\/blog\/?p=5907"},"modified":"2024-07-31T23:21:12","modified_gmt":"2024-07-31T18:21:12","slug":"companies-with-the-most-debt-poised-to-benefit-from-a-rate-cut","status":"publish","type":"post","link":"https:\/\/ksestocks.com\/blog\/companies-with-the-most-debt-poised-to-benefit-from-a-rate-cut\/","title":{"rendered":"Companies with the Most Debt Poised to Benefit from a Rate Cut"},"content":{"rendered":"\n<p>After today&#8217;s rate cut, the following companies burdened with substantial debt stand to gain significantly from reduced markup payments.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Cement Sector<\/strong><\/h2>\n\n\n\n<p>The cement sector features prominently among the highly indebted, with several companies carrying substantial debt loads:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Bestway Cement (BWCL):<\/strong> With a total debt of PKR 61 billion, BWCL is highly leveraged. A 100 basis points cut could significantly lower their interest payments, aiding their profitability.<\/li>\n\n\n\n<li><strong>D.G. Khan Cement (DGKC):<\/strong> Carrying a debt burden of PKR 40 billion, DGKC will also experience considerable savings on interest expenses.<\/li>\n\n\n\n<li><strong>Fauji Cement (FCCL): <\/strong>With PKR 39 billion in debt, FCCL will benefit similarly, with reduced financial costs leading to improved earnings.<\/li>\n<\/ul>\n\n\n\n<p>These companies are likely to see some relief in their earnings, even though a portion of their debt is already subsidized under the Temporary Economic Refinance Facility (TERF) and the Long-Term Financing Facility (LTFF).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Technology &amp; Communication Sector<\/strong><\/h2>\n\n\n\n<p>PTC from the tech sector is not immune to high debt levels:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Pakistan Telecommunication Company (PTC):<\/strong> Encumbered with a debt load totaling PKR 231.3 billion, with a debt-to-asset ratio of 36%. A rate cut of 50 bps is projected to have a notable impact on their financials, reducing costs by approximately PKR 3.8 billion.\u00a0<\/li>\n<\/ul>\n\n\n\n<p>A rate cut will help the company in reducing their interest payments, freeing up capital for further investment and growth.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Textile Sector<\/strong><\/h2>\n\n\n\n<p>Textile companies are among the most leveraged, with significant debt burdens:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Interloop Limited (ILP):<\/strong> With a total debt accumulating to PKR 65.8 billion, this market player stands to save around PKR 1.4 billion with a 50bps rate cut.\u00a0<\/li>\n\n\n\n<li><strong>Gul Ahmed Textile Mills (GATM):<\/strong> Owing a cumulative debt of PKR 65.0 billion, GATM could see savings of around PKR 740 million from a similar rate cut.<\/li>\n\n\n\n<li><strong>Nishat Mills Limited (NML):<\/strong> Facing debt amounting to PKR 77.9 billion, NML is set to save about PKR 351 million from a 50bps rate cut.\u00a0<\/li>\n<\/ul>\n\n\n\n<p>These textile giants will see a considerable positive impact from a rate cut, reducing their financial costs and potentially boosting their competitive edge in both domestic and international markets.<\/p>\n\n\n\n<p>Consequently, this rate cut is a pivotal move that could spur economic growth, lower government expenditure on interest payments, and provide a much-needed boost to Pakistan&#8217;s fiscal stability.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>After today&#8217;s rate cut, following companies burdened with substantial debt stand to gain significantly from reduced markup payments.\u00a0<\/p>\n","protected":false},"author":4890,"featured_media":4216,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[153],"tags":[318,186,41,114,38,211,158],"class_list":["post-5907","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy","tag-bwcl","tag-dgkc","tag-fccl","tag-gatm","tag-ilp","tag-nml","tag-ptc"],"featured_image_src":{"landsacpe":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/04\/SBP-Monetary-Policy-1140x445.jpg",1140,445,true],"list":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/04\/SBP-Monetary-Policy-463x348.jpg",463,348,true],"medium":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/04\/SBP-Monetary-Policy-300x188.jpg",300,188,true],"full":["https:\/\/ksestocks.com\/blog\/wp-content\/uploads\/2024\/04\/SBP-Monetary-Policy.jpg",1920,1200,false]},"_links":{"self":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/5907","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/users\/4890"}],"replies":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/comments?post=5907"}],"version-history":[{"count":0,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/posts\/5907\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media\/4216"}],"wp:attachment":[{"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/media?parent=5907"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/categories?post=5907"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ksestocks.com\/blog\/wp-json\/wp\/v2\/tags?post=5907"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}