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INDU-3QFY24E & HCAR 4QMY24E Result Previews, (AKD Daily Apr 25, 2024)

AKD Daily INDU-3QFY24E & HCAR 4QMY24E Result Previews INDU - 3QFY24E EPS of PkR43.3 expected: Indus Motor Company Limited (INDU)’s board is scheduled to announce their 3QFY24E earnings on 26th April, where we expect earnings to clock in at PkR3.4bn (EPS: PkR43.3) vs. PkR1.7bn (EPS: PkR22.2) in the preceding quarter, an increase of 95%QoQ. The said quarterly increase is primarily driven by a 2.4x increase in sales volumes, totaling 6,503units compared to 2,687units in the previous quarter, with surge attributable to the new-year effect and launch of Corolla Cross. Topline is projected to significantly increase by 2.5xQoQ to PKR46.1bn, primarily on the back of aforementioned incline in sales volume. Gross margins are expected to improve to 8.5% from 7.8% in 2QFY24 partly due to a slight PkR appreciation in the outgoing quarter. Additionally, other income is anticipated to witness an increase of 7%QoQ to clock in at PkR2.7bn, owing to higher short-term investments during the previous quarter. Overall, 9MFY24E earnings are projected to accumulate to PkR106.4/sh, compared to PkR74.4/sh in SPLY (up 43%YoY). Along with that, we expect company to announce first-quarter cash dividend of PkR26.0/sh, taking total payout during the nine-month to PkR63.7/sh. HCAR – Earnings to clock in at PkR4.4/sh in 4QMY24E: HCAR is expected to announce its 4QMY24E earnings sometime in the next month, where-in the company is expected to report earnings of PkR626mn (EPS: PkR4.4) vs. PkR143mn (EPS: PkR1.0) in the quarter before, an increase of 4.4xQoQ. The said incline in profitability is due to higher sales volumes, where the total sales volume rising to 4,624 units (↑95% QoQ), owing to the new-year impact. Revenue is expected to clock in at PkR24.7bn vs. PkR12.5bn in 3QMY24, up 99% due to higher sales. Additionally, we estimate gross margins to improve to 8.8% (vs. 8.3% in the quarter before) largely attributable to a stable exchange rate. Furthermore, other income is expected to contract by 77%QoQ due to a decline in the company's cash and equivalents. Moreover, finance costs are expected to remain elevated at PkR479mn due to increased reliance on borrowing amidst higher working capital requirements. Overall, that takes MY24 earnings to PkR11.1/sh (up 6.0xYoY), primarily due to absence of higher exchange losses in MY23. Lastly, we expect HCAR to announce cash dividend of PkR3.0 along with the result.