Indus Motor Company posts PAT of PKR 3.6 bn in 3QFY21

Indus Motor Company Limited posted PAT of PKR 3.6Bn (EPS: PKR 46.0) in 3QFY21 (↑35/22% YoY/QoQ), taking the 9MFY21 earnings to PKR 8.4Bn (EPS: PKR 107.1) (↑69% YoY). The uplift in profitability is attributable to volumetric growth in sales to 16,531 units (↑49/15% YoY/QoQ) and exchange rate appreciation (↑1.4% QoQ) in 3QFY21. The company also announced a DPS of PKR 30/sh, taking total 9MFY21 dividend payout to PKR 67/sh. The result was largely inline with our expectation. Key highlights of the result are summarized below: –

Indus Motors Company Limited registered higher net revenue of PKR 51.5Bn (↑56/13%, YoY/QoQ), due to higher unit sales (↑49/15% YoY/QoQ) and increase in ex-factory price of all variants of the Toyota Corolla by PKR 0.08Mn. Resultantly, the 9MFY21 topline increased to PKR 131.2Bn, up 73% YoY.

The gross margin clocked-in at 9.2% in 3QFY21, as compared to 12.1/8.2% in 3QFY20/2QFY21. This further translated into a higher gross profit of PKR 4.7Bn, up 18/27% YoY/QoQ. The improvement in gross margin was on the back of higher unit sales of the total vehicle lineup and particularly sales of the Toyota Fortuner at 1,202 units in 3QFY21, up 132/40% YoY/QoQ.

The distribution expense was reported at PKR 394Mn (↓21/↑14% YoY/QoQ). INDU reported administration expense of PKR 418Mn (↑22/27% YoY/QoQ), which could be due to employee bonus given record production of 6,815 units in March.

The other expenses clocked-in at PKR 314Mn (↓12/↑27% YoY/QoQ). On the other hand, other income posted a healthy increase of 29/5% YoY/QoQ to PKR 1,436Mn, due to the PKR appreciation against the USD (↑1.4% QoQ) .

Financial charges were reported at PKR 21Mn (↑31/↓11% YoY/QoQ), on the back of stable interest rates, little to no debt and large advance receipts against vehicle booking.

We have a BUY call on INDU with Dec-21 target price of PKR 1600/sh, offering an upside of 47.5% from last close.

Courtesy – BMA Capital Management Ltd.

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