INDU_1QFY22 Result Review, (AKD, Off the Analyst's Desk, Oct 26, 2021)
AKD, Off the Analyst's Desk
INDU: 1QFY22 Result Review
- Indus Motor Company Limited (INDU) announced its 1QFY22 NPAT of PkR5.4bn (EPS: PkR69.02), up 194%YoY and 23%QoQ.
- The topline swelled by 92%YoY/37%QoQ owing to 59%YoY/28%QoQ increase in volumes where the reductions in prices in light of budgetary measures has stimulated the demand.
- The gross margin of the company normalized to 10.8% vs 12.3% in 4QFY21 owing to currency devaluation of 6.7%QoQ and increase in CRC/HRC prices by 5.1/1.8%QoQ.
- The contribution from other income inflated by 88%YoY/21%QoQ, translating into PkR18.5/sh after tax, attributed to gigantic cash & ST investment reserve of PkR84bn as of 4QFY21.
- Although we expect a gradual slowdown industrywide in later half of FY22 owing to monetary tightening, we expect INDU to sail freely on account of mounting farmers' income and inadequate competition in sedan segment, reiterating our Buy stance (TP: PkR1,587/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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