INDU 3QFY25E earnings to clock in at PkR5.7bn (EPS: PkR72.8):
We anticipate INDU to report earnings of PKR 5.7 billion (EPS: PKR 72.8) in 3qfy25e, compared to PKR 4.4 billion (EPS: PKR 56.6), representing a 29% year-over-year increase. The said growth is primarily driven by a rise in total sales volumes, up 40% year-over-year (Yoy) to 9,077 units, compared to 6,503 units in the same period last year, given a low base due to supply chain disruptions that led to multiple days of plant shutdowns last year.
Topline is anticipated to rise by 31% year-over-year (Yoy), primarily attributed to the reasons above, as well as the inclusion of Corolla Cross sales for the entire quarter. Moreover, gross margins are expected to remain at 14.5%, largely unchanged year-over-year.
Regarding opex, the decline in warranty claims associated with the launch of Corolla Cross sales is expected to result in a 58% year-over-year decrease in operating expenses. Overall, 9MFY25, earnings are expected to reach PkR199.5/sh, up 67%YoY. Additionally, we anticipate INDU to announce an interim dividend of PKR 44.0/share, bringing the 9mfy25 dividend to PKR 120.0/share. We maintain a ‘BUY’ call on the scrip with a target price of PKR 3,350 per share for December 2025.
HCAR – 4QMY25E earnings to clock in at PkR1.1bn (EPS: PkR7.92):
We expect HCAR’s earnings to clock in at PKR 1.1 billion (EPS: PKR 7.92) vs. PKR 1.4 billion (EPS: PKR 9.60) in the previous year, a decline of 17% year-over-year. The decrease in profitability is due to a one-off tax reversal of Pkr 618 million in 4q MY24. However, total sales volume during the quarter increased by 12% year-over-year (Yoy) to 5,653 units in 4qmy25. Subsequently, the topline is projected to grow by 7% year-over-year (Yoy) to PKR 26.8 billion (vs. PKR 24.9 billion in 4qmy24).
Additionally, gross margins are projected to improve to 9.8%, primarily due to a decline in CRC/HRC prices, down 15.3% and 15.0% year-over-year (Yoy), respectively, and an enhanced proportion of Civic in the sales mix. Additionally, finance costs are expected to decline by 92% year-over-year (Yoy) amid a decline in total outstanding debt and falling financing rates. Overall, earnings for MY25 are anticipated to decrease by 8% year-over-year (Yoy) due to the aforementioned tax reversal in 4q MY24. Moreover, we anticipate HCAR to announce a final dividend of PkR6.0/sh. We maintain a ‘BUY’ stance on the stock with a target price of PKR 426/share for Dec ’25.
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