Pak Suzuki Motors Company Ltd. (PSMC) is scheduled to release its 1Q result on 22nd Apr ’21. We expect the company to post profit after tax (PAT) of PKR 1,455mn (EPS: PKR 17.68), compared to a loss of PKR 941mn (LPS: PKR 11.44) in 1QCY20 and a profit of PKR 1,009mn (EPS: PKR 12.26) in 4QCY20.

The company’s net sales are expected to increase by 159% YoY to PKR 46bn as total volumetric sales increased by 106% YoY (28,077 vs 13,605 units in 1QCY20). Gross margins are expected to improve by 334bps to 6.57% amid appreciation of PKR against regional currencies along with the surge in car prices resulting in higher gross margins compared to gross margins of 3.23% in 1QCY20.

Finance costs of the company are expected to decrease by 78% YoY to PKR 230mn on account of reduction in short term borrowings and lower interest rates compared to SPLY.

Courtesy – AHL Research