Pakistan Autos_Projections incorporating recent macro-economic developments, (AKD Daily, Jun 17, 2022)
AKD Daily
Pakistan Autos: Projections incorporating recent macro-economic developments
- We revisit our investment case for the OEMs under our coverage. Incorporating recent macroeconomic developments, with RF of 15.5% and USD/PkR parity of 198 for FY23 and 210 for FY24. Incorporating these assumptions, we have revised our target prices for PSMC, HCAR and INDU for Jun’23, now PkR165/sh, PkR172/sh and PkR1,392/sh respectively.
- Demand for the automobile industry is expected to reduce in FY23, mainly owing to monetary tightening by the SBP and budgetary measures by the Govt. Hence, FY23 is going to be a testing year for the sector with demand taking a hit, while gross margins are expected to remain under stress.
- Beyond the next 2 years, we expect purchasing power of the consumers to rebound, when interest rates and inflation move their way back to normalcy. With hikes in costs expected to be passed-on to consumers and as automobiles continue to be viewed as an asset-class in Pakistan, long-term prospects of the industry remain encouraging.
- Our top pick for the sector remains INDU, currently offering a total return of 29% (D/Y 13%), due to strong income from ST Investments, brand recognition sustaining demand, and relatively less dependence on sales through auto-financing.
AKD Research
Pak Suzuki Motor is engaged in assembling, progressive manufacturing and marketing of Suzuki cars, pickups, vans, and 4X4 vehicles. Co.'s product models include Baleno, Margalla, Mehran, Kyber, Ravi Pickup, Bolan Van and Potohar Jeep.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.