Ayesha Mudassar

The gross profit of Indus Motor Company Limited (INDU) grew by 129%, profit-before-tax (PBT) by 57% and profit-after-tax (PAT) by 38%, respectively, during the first quarter of the ongoing calendar year (1QCY24) as compared to the corresponding period of last calendar, according to WealthPK.

The company earned a gross profit of Rs6.9 billion and a PBT of Rs7.6 billion during this quarter. The INDU posted a PAT of Rs4.4 billion and earnings per share (EPS) of Rs56.61 in 1QCY24. During 1QCY24, the auto assembler posted a revenue of Rs47.3 billion compared to Rs48.1 billion in the same period of the previous year, registering a decline of 2%.

Large-cap automobile assemblers: operational performance

Large-cap automobile assemblers include INDU, Millat Tractors Limited (MTL), Atlas Honda Limited (ATLH), Sazgar Engineering Works Limited (SAZEW), and Honda Atlas Cars (Pakistan) Limited (HCAR). The cumulative net sales grew by 25%, gross profit by 92%, and net profit by 178% during 1QCY24 compared to the corresponding quarter of last calendar year. The automobile assemblers posted net sales of Rs161 billion and a gross profit of Rs24.9 billion in 1QCY24. The net profit stood at Rs15.09 billion against Rs5.4 billion in the same period last year, resulting in EPS of Rs159.26 versus Rs59.79 in 1QCY23. The robust performance was due to a better sales mix, efficient treasury operations, and prudent management of increased liquidity.

In addition, the gross and net margins settled at 15% and 9%, respectively, in 1QCY24. Higher margins portray the prudent management of expenses. Operating expenses encompassing administrative, selling and distribution, and other costs declined marginally from Rs9.06 billion to Rs8.3 billion during the quarter under review. Furthermore, the assemblers’ finance cost dipped by 98% year-on-year (YoY) and stood at Rs940.6 million compared to Rs42.8 billion in 1QCY23. On the tax front, the sector paid a significantly higher tax worth Rs7.7 billion against Rs3.3 billion paid in the corresponding period of last year, depicting a rise of 128% YoY.

Financial comparison among assemblers

In 1QCY24, INDU topped the peer companies by grabbing the highest quarterly sales of Rs47.3 billion followed by ATLH with net sales of Rs43.8 billion. HCAR came in as the third largest

revenue collector with sales of Rs24.9 billion. MTL's sales in the first quarter of CY24 were Rs24.8 billion, whereas SAZEW made the lowest revenue of Rs20.05 billion. In terms of gross profit, INDU earned the highest gross profit of Rs6.9 billion in 1QCY24. SAZEW posted a gross profit of Rs5.8 billion and MTL Rs5.6 billion. ATLH and HCAR posted gross earnings of Rs4.4 billion and Rs2.1 billion, respectively, during the quarter under review. INDU again posted the highest net profit of Rs4.4 billion followed by ATLH and SAZEW with net earnings of Rs3.6 billion and Rs3.03 billion, respectively. MTL earned a net profit of Rs2.6 billion and HCAR posted the lowest profit worth Rs1.3 billion.

Company profile

INDU was incorporated in Pakistan as a public limited company in December 1989 and started commercial production in May 1993. Registered on Pakistan Stock Exchange with the symbol 'INDU', the company is the largest entity in the automobile assembler sector with a market capitalisation of Rs132.8 billion. The company's primary activities include assembling, progressive manufacturing and marketing Toyota vehicles in Pakistan.

Credit: INP-WealthPk