LAHORE (PPI) - While Attock Petroleum Limited (APL) posted an impressive earnings growth of 18 percent in 9MFY11, the result came largely inline with expectations. The companys net sales increased by an impressive 17 percent mainly owing to 1) expansion of its retail distribution network (MOGAS sales up 18 percent) along with higher furnace oil sales (up 59 percent). Though, Other Income rose by 72 percent on account of recognition of interest income on dues receivables, the finance cost also jumped by 170 percent (as the company expensed interest on its payables). Income from bank deposits and ST investments continued to further augment the bottomline, contributing 20 percent to the total profits. While the companys profits increased by 16 percent QoQ in 3Q, we expect a stronger 4Q ahead. We believe seasonal uptick in high margin asphalt sales along with rising margins on FO should boost profitability in 4Q. Historically, 4Q has contributed an average 33 percent to the full year profits. Post the recent price momentum (26 percent since book closure on Oct 19, 2010), we believe the current market price reflects the fair value of the scrip and offers a limited upside (3 percent). However, we expect a pre-announcement excitement to final cash dividend (estimate: Rs18.5/share) ahead. While the scrip trades at a discount of 14 percent to the markets FY11E earnings multiple, it has historically traded at an average discount of 31 percent to the market.