INDU_FY22 Result Review, (AKD Off the Analyst's Desk Aug 30, 2022)
AKD, Off the Analyst's Desk
INDU: FY22 Result Review,
Indus Motor Company Limited (INDU) announced its FY22 result today where it posted a NPAT of PkR509mn (EPS: PkR6.5) in 4QFY22, down by 90%QoQ and 88%YoY. This brings cumulative FY22 earnings to PkR15.8bn (EPS: PkR201.0), up 23%YoY. The result is well below our expectations (4QFY22 EPS: PkR42.1/sh) as well as the market’s owing to a decrease in gross margins.
· The company recorded PkR72.1bn in revenue for the final quarter of the year, increasing by 6%QoQ while up 50%YoY and is in line with our expectations. Hence, revenue for FY22 has clocked in at PkR275.5bn (+54%YoY).
· Gross profit for 4QFY22 is PkR837mn (-84%QoQ/-86%YoY) on the back of substantially low gross margins, clocking in at 1.2% for the quarter. To recall, gross margins in 3QFY22 were 7.7% while margins for 9MFY22 were 8.6%. We believe the margins have decreased this quarter on the back of higher freight costs along with currency devaluation. Cumulative gross profit for FY22 is PkR18.4bn, increasing by 11%YoY.
· The company has recorded other income of PkR5.2bn in the quarter owing to strong holdings in ST investments and cash balances along with elevated interest rates. This brings total other income for the year to PkR12.9bn (PkR164.6/sh), up 132%YoY. Other income has become the core driver of earnings in FY22, contributing to 82% of the NPAT, while contribution to earnings in FY21 stood at 43%.
· Taxation for the final quarter of the year is PkR3.8bn (ETR: 88%) due to the expected adjustment for the 10% Supertax applicable on the earnings of FY22. Hence, total taxation for FY22 has clocked in at PkR9.7bn, with an ETR of 38%.
· The company announced final cash dividend of PkR3.3/sh, taking cumulative dividends during the year to PkR93.8/sh with a payout ratio of 47%.
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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