Report
EUR 8.90 For Business Accounts Only

INDU: FY17 Briefing Notes and Company Outlook

INDU held its quarterly analyst briefing, affirming their outlook on sustained offtake from upgraded products, completion of paint shop enhancement exercise lifting capacity and enhanced competition to catalyze change in the sector over the medium term. Posting FY17 NPAT of PkR13.0bn (EPS:PkR165.41) up 13%YoY, the company managed to widen GM by 135bpsYoY while finance costs jumped 4.2xYoY due to initiation of late delivery payments to buyers. Despite these factors, the absence of INDU from the high growth small-low passenger vehicle segment remained a drawback as management re-iterated tepid guidance for new models targeting this market segment. Expecting new entrants to enhance competition in the industry and the AIDP-II incentives to give an initial boost to them, INDU’s plan to tackle these tides, remains centered on current product portfolios with incremental CAPEX on enhancing efficiencies. Remaining sanguine on the company's ability to pass on cost escalations (including pressures from PkR weakness), we re-iterate our FCFE based TP of PkR2,039/sh, 20% upside from current price level BUY!.

Underlying
Industrial Motor Co.

Indus Motor is engaged in the assembly, progressive manufacture, import and marketing of Toyota motor vehicles. Co. is also the sole distributor of Toyota and Daihatsu vehicles in Pakistan.

Provider
AKD Securities Limited
AKD Securities Limited

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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