Ayesha Mudassar

Panther Tyres Limited’s (PTL) sales surged by 77% to Rs7.9 billion during the first three months (July-September) of the current fiscal year 2023-24 (3MFY24) from Rs4.4 billion over the corresponding period of the earlier fiscal, reports WealthPK. The growth in the top line reflects the management’s renewed focus on the addition of new countries and products to the export portfolio. The gross profit increased by a mammoth 249% to Rs1.2 billion in 3MFY24 from Rs367 million during 3MFY23, signifying the company’s efforts to manage costs and enhance operational efficiencies. Furthermore, the company earned a profit-after-taxation of Rs301 million compared to a loss of Rs267 million during 3MFY23, posting another super growth of 213%.

Selling and distribution expenses increased from Rs210 million to Rs365 million due to higher marketing and branding spending to support the company in achieving its ambitious plans. The financial costs dropped from Rs328 million to Rs286 million. The implementation of fiscal discipline helped the company to contain the escalating finance costs and to successfully achieve efficiency across all operations. The company shed the losses per share in 3MFY23 and posted earnings per share of Rs1.79 in 3MFY24, indicating a rise in the company’s profitability.

Company’s financial position during FY23

The financial year ending on June 30, 2023 turned out to be the most challenging as the country faced depleting forex reserves, currency devaluation and rising inflation. The analysis of the company's financial position in FY23 showed a growth of 14.4% in its non-current assets compared to FY22. This rise indicates the company’s investment towards enhancing production capacity and overall operations. However, the current assets fell by 20.1% to Rs8.2 billion in FY23 from Rs10.2 billion in FY22. This was the result of a 92% reduction in short-term deposits and 21% in cash balance.

During FY23, the non-current liabilities witnessed a moderate growth of 3.7% compared to FY22. This growth shows that the company took additional long-term liabilities or debt to finance its operations during the year. In contrast, the current liabilities decreased by 12.8% to Rs8.23 billion in FY23 from Rs9.45 billion in FY22.

Company profit and future outlook

Panther Tyres Limited, established in Pakistan in 1983, is one of the leading manufacturers and suppliers of auto tyres, tubes, lubricants and spare parts. The company is Pakistan’s top supplier of motorcycle tyres for both the regional equipment manufacturers and replacement markets. The company is likely to face headwinds in the current financial year due to worsening economic conditions and political uncertainty in the country. On a global level, the reduction in prices of raw materials (natural rubber, butyl, carbon) would help the company partially offset the adverse impact of rupee-dollar fluctuation. The management of the company is aware of these challenges and is working on plans to address them.

Credit: INP-WealthPk