Cairo – Mubasher: Pharos Research re-initiated coverage on Qalaa Holdings’ stock with an “Overweight” recommendation at a fair value (FV) of EGP 3 per share.
The research company is concerned over Qalaa Holdings’ debt exposure that soared 110% in during the period between the third quarter of 2016 and Q3-17, following the exchange rate liberalisation, according to a recent report by Pharos.
“Our concern is that the debt exposure is on the holding level as well as across platform companies, which could stifle growth prospects in subsidiaries and limit their ability to reach their full potential,” the report highlighted.
The cement and mining segments make up 14% of Pharos’ valuation, while the agribusiness and the energy segments account for 8% and 73% of the valuation, the Cairo-based firm indicated.
Qalaa Holdings had previously posted a 203% year-on-year hike in consolidated losses in the nine months ended September 2017 to record EGP 4.08 billion, up from EGP 1.3 billion in the same nine-month period of 2016.
