Indus Motor posts 35% surge in earnings

Profit rises on back of increase in sales volume, currency appreciation


Our Correspondent April 30, 2021
Pakistan is seeing a massive growth in car sales, which amounted to 184,099 units in the 10 months of the ongoing fiscal year with Indus Motor’s share being 52,987. PHOTO: IMC

KARACHI:

Indus Motor Company reported a 34.9% increase in profit that reached Rs3.6 billion in the quarter ended March 31, 2021.

According to a notice sent to the Pakistan Stock Exchange (PSX) on Thursday, the company had registered a profit of Rs2.7 billion in the corresponding quarter of previous year. Accordingly, earnings per share of the company came in at Rs45.98 in Jan-Mar 2021 compared to Rs34.09 in the same quarter of last year.

Along with the result, the company announced an interim cash dividend of Rs30 per share for the Jan-Mar quarter. During the quarter under review, net sales of the company amounted to Rs51.5 billion, up 55.8% compared to Rs33 billion in the same quarter of 2020.

“Growth in revenue came on the back of 49% year-on-year surge in volumes with 16% improvement in other income (possibly due to higher cash and equivalents),” said JS Global analyst Ahmed Lakhani.

Moreover, on a quarterly basis, earnings grew 22%, where 15% increase in volumes and favourable rupee-dollar movement provided the impetus to earnings, Lakhani pointed out. Other income of the firm rose to Rs1.4 billion during the quarter under review compared to Rs1.1 billion in the same quarter of last year, a surge of 29.4%.

Read; Indus Motor’s profit soars over 200%

Arif Habib Limited analyst Arsalan Hanif said that other income increased on the back of a significant jump in short-term investment (government securities), and cash and bank balance. The company reported finance cost at Rs21.2 million, up 30.7% against Rs16.3 million last year.

Hanif said that gross margins settled at 9.21% in the quarter under review, down 292 basis points year-on-year due to increase in prices of raw material and higher freight cost.

He, however, added that margins increased 98 basis points quarter-on-quarter due to appreciation of Pakistani rupee against the greenback.

Effective taxation for the Jan-Mar 2021 quarter stood at 28.23% compared to 31.41% in the same period of last year.

Indus Motor’s share price dropped Rs0.17, or 0.02%, to close at Rs1,084.83 with volumes of 15,000 shares in a bearish session at the PSX.

Nine-month result

Indus Motor’s profit soared 68.8% to Rs8.4 billion in nine months ended March 31, 2021. The company’s profit had stood at Rs4.98 billion in the corresponding period of last year.

Earnings per share of the company came in at Rs107.07 in Jul-Mar FY21 compared to Rs63.41 in the same period of last year.

Published in The Express Tribune, April 30th, 2021.

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