Indus Motor Company Limited (INDU) announced their financial results today, posting earnings of PKR 5,425mn (EPS: PKR 69.02), up by 194% YoY and 23% QoQ from PKR 1,845mn (EPS: PKR 23.48) and PKR 4,413mn (EPS: PKR 56.15). Along with the result, INDU also declared an interim cash dividend of PKR 34.50/share vs PKR 12.00/share in 1QFY21.

Result Highlights

·        Topline of the company increased by 92% YoY to PKR 65.6bn attributable to change in sales mix and volumetric growth of 59% YoY to 18,646 units (Yaris 7,240 units, Corolla 6,596 units, Fortuner 1,601 units, Hilux 3,209 units) vs. 11,715 units (Yaris 6,009 units, Corolla 3,614 units, Fortuner 390 units, Hilux 938 units) in 1QFY21.

·        Gross margins settled at 10.79%, up by 410bps YoY amid change in sales mix from low margin vehicles to high margin Fortuner and Hilux.

·        Other income increased by 88% YoY and 21% QoQ to PKR 2,047mn amid drastic surge in short term investments (PIBs and T-Bills).

·        Effective tax rate during 1QFY22 was set at 29.39% in contrast to 30.25% in 1QFY21.

 Recommendation:

·        Currently, we have a ‘BUY’ call on the stock with a Dec’21 target price of PKR 1,524/share.

 Courtesy – AHL Research