INDU 4QFY23 Result Review? Earnings beat market consensus, (AKD Off the Analyst's Desk Aug 28, 2023)
AKD, Off the Analyst's Desk
INDU 4QFY23 Result Review– Earnings beat market consensus
Indus Motor Company Ltd. (INDU) announced its 4QFY23 results today, where the company posted earnings of PkR3.8bn (PkR48.6/sh), showing a 19%QoQ increase from the preceding quarter's PAT of PkR3.2bn (EPS: PkR40.9). The earnings surpass street consensus, primarily attributed to improved gross margins. The company also declared a cash dividend of PkR29/sh.
- Topline clocked in at PkR42.7bn, marking an 11%QoQ decline from the previous quarter's PkR48.2bn, driven by a 25% drop in sales volumes that offset the price increases. For FY23, the topline faced an annual contraction of 35% due to a significant 58% decline in sales volumes, with 31.1k units sold compared to 74.5k units in the corresponding period.
- Gross margins notably improved to 18.1% during the quarter, a substantial rise from 6.3% in 3QFY23 and 1.2% in SPLY. This improvement can be attributed to the full impact of increased prices during the quarter, stable PkR/US$ parity, and annual accounting adjustments.
- Operating expenses witnessed a 16%QoQ increase, totaling PkR1.2bn, driven by inflationary pressures. However, annual decline 24% in other expenses is due to decreased transportation and advertising costs.
- Other income experienced a decline of 17%/51% QoQ/YoY, clocking in at PkR2.5bn, due to decrease in short-term investments, which went to PkR38.4bn from PkR140.9bn in Jun’22 (↓73%). For the full year, increase of 10%YoY in other income is attributable to interest rate hikes.
- The effective taxation charge for the quarter amounted to PkR4.4bn, ETR: 53% vs 34% in the previous quarter, due to the retrospective implementation of super tax.
- For the entire fiscal year, PAT reached PkR9.7bn (EPS: PkR123.0), down by 39%YoY from PkR15.8bn (EPS: PkR 201.0) in FY22, mainly due to reduced sales volumes and shrinking gross margins.
- In addition, INDU announced cash dividend of PkR29/sh, taking the full year dividend to PkR71.8/sh.
AKD Research
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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