Indus Motor profit surges to Rs5.4b

Hefty jump in sales, other income drives increase in earnings

KARACHI:

Indus Motor Company’s profit soared 194% to Rs5.4 billion in the quarter ended September 30, 2021 on the back of nearly twofold increase in sales and other income.

According to a notice sent to the Pakistan Stock Exchange on Tuesday, the carmaker had reported a profit of Rs1.8 billion in the same quarter of last year. Earnings per share of the enterprise jumped from Rs23.48 during July-September 2020 to Rs69.02 in July-September 2021.

Along with the result, the vehicle manufacturer declared an interim cash dividend of Rs34.5 per share against Rs12 per share for the April-June quarter.

During July-September 2021, net sales of the company amounted to Rs65.6 billion, which was 92% higher than Rs34.2 billion in the corresponding period of previous year. Arif Habib Limited analyst Arsalan Hanif said that topline of the company increased due to the change in sales mix and volumetric growth of 59% year-on-year to 18,646 units. He pointed out that the carmaker had sold 11,715 units in the corresponding period of 2020.

“Gross margins settled at 10.79%, up 410 basis points amid a change in sales mix from low-margin vehicles to high-margin Fortuner and Hilux,” he said.

Other income soared 88% to Rs2 billion in the July-September 2021 quarter against Rs1.1 billion in the corresponding period of previous year.

“Other income increased amid a significant surge in short-term investments (PIBs and T-bills),” said Hanif. “Effective tax rate during Jul-Sept 2021 was 29.39% in contrast to 30.25% in Jul-Sept 2020.” During the day, the share price of the company increased Rs10.76 to close at Rs1,125 with 5,440 shares changing hands at the Pakistan Stock Exchange.

Published in The Express Tribune, October 27^th, 2021.

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