KARACHI: Sazgar Engineering Works Limited, the makers of Sazgar auto rickshaws, has posted a net income of Rs143 million in fiscal year ended on June 30, up 32% compared with Rs108 million in the previous year, according to a company notice sent to the Pakistan Stock Exchange (PSX).
Earnings per share (EPS) jumped to Rs7.95 from Rs5.99 in the previous year.
The KSE-100 index closed at 42,666, down 77 points or 0.18% on Tuesday, while Sazgar’s share price closed at Rs171.31, up 4%. The company announced Bonus Shares in the proportion of 20 shares for every 100 shares held along with the results.
Earlier in May, the company announced that it has decided to explore new opportunities for the manufacturing of passenger cars and light commercial vehicles (LCVs) in Pakistan.
The company intends to set up a brand new car plant under the Greenfield Investment Category that has already been announced in the five-year Automotive Development Policy (ADP) 2016-21.
The new auto policy, announced last year, has attracted many new players to the automobile industry. Most of the new local companies have already announced big investment plans in collaboration with leading global automakers like Kia, Hyundai, etc.
In September 2016, Sazgar Engineering announced an investment of Rs330 million to expand its production capacity from 20,000 units to 30,000 units per year. The company wants to benefit from the increasing market demand for auto rickshaws and the future growth in the automobile sector.
The expansion plan was being implemented on 27 acres of land located near Raiwind, Lahore. At present, the company’s production facilities are spread over five acres.
The company posted a net profit of Rs108 million in fiscal year 2016, up 46% from Rs74 million in fiscal year 2015.
Analysts say the absence or limitation of public transport facilities in big cities has provided a wider space for auto rickshaws. Over the years, compressed natural gas (CNG) auto rickshaws have gradually replaced taxis in major cities, especially in Lahore and Karachi. Sazgar makes four-stroke CNG auto rickshaw (three-wheelers) and automotive wheel rims.
Published in The Express Tribune, September 27th, 2017.