INDU - Can the "Cross" conquer! INDU's move to democratize HEVs, (AKD Daily, Dec 15, 2023)
AKD Daily
INDU - Can the “Cross” conquer! INDU's move to democratize HEVs
- INDU has finally launched its much-anticipated HEV, the "Corolla Cross," featuring two variants—HEV X and the base variant—priced at PkR9.4mn and PkR9.8mn, respectively. The offered pricing positions the “Cross” as a value-for-money choice in the HEV market.
- The competitive pricing strategy positions to even fetch some market share of other SUVs in the similar price range. We anticipate the company to capture around 40% of the HEV market share, selling ~1,250 units in 2HFY24.
- Company’s demand recovery is expected amid increased demand from rural areas, driven by improved farmers’ income given higher rates and better crops of cotton and sugar. Notably, Toyota holds the highest market share (sedan) in rural and small-tier cities.
- Despite a reduction in prices in Oct’23, company is anticipated to maintain gross margins, thanks to a stable parity of the rupee against the dollar and Japanese yen (flat in last 3 quarters), and easing CRC prices (US$650/ton vs. FY23 avg. of US$700/ton).
- We maintain a "Buy" rating on the stock, with a Dec’24 target price of PkR1,580/sh, reflecting an upside potential of 24.6% from the last closing and FY24 D/Y of 5.9%.
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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