Auto sector records growth of 30% in Jan-May

All three companies post double-digit rate of increase.

KARACHI: The three auto companies of the country have shown phenomenal growth of 30% against just a 4% gain in the Karachi Stock Exchange (KSE) 100-Index during the first five months (Jan-May) of calendar year 2015.

While all three companies posted a double digit growth in share price, the highest jump was seen in Indus Motor Company, the makers of Toyota Corolla, which posted astounding gains of 41% calendar year to-date (CYTD).

The other two companies, Honda Atlas Cars and Pak Suzuki Motor rallied 21% and 19%, respectively, in the period under review. The fundamental reason for price run can be attributed to volumetric growth and expansion in gross margins, according to Global Research said on Tuesday.

During the first quarter (Jan-Mar) of calendar year 2015, Indus registered earning growth of 239% year-on-year (YoY) to Rs3.28 billion. Pak Suzuki’s profitability surged by 114% YoY to Rs946 million.

“Moreover, we estimate Honda Atlas Cars earnings to follow the same suit, and is expected to report earnings growth of 70% YoY to Rs1.07 billion,” the report added.

For fiscal year (Jul-Jun) 2014-15, the report estimated domestic car sales (including PV & LCV) to grow by 31% YoY to 179,231 units primarily due to the success of the new Corolla and deliveries of LCVs under Punjab’s Apna Rozgar Scheme from second half of fiscal year 2015.

Published in The Express Tribune, May 6^th,  2015.

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