Intermarket Securities Limited - Industrial Motor Co. (INDU) Intermarket Pulse: INDU: TP raised to PRs1,920/sh; maintain Neutral

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Intermarket Securities Limited

Ahmed Raza

EUR 3.48 For Business Accounts Only

Intermarket Pulse: INDU: TP raised to PRs1,920/sh; maintain Neutral

We raise our Jun-18 TP for INDU to PRs1,920/sh (up 5%) but maintain our Neutral stance. This is mainly due to downward revision in finance cost and slight increase in ‘other income’, without changing our margin/volume assumptions. The scrip provides 11% upside along with 7% D/Y.
According to management, debottlenecking project is in testing phase; production will gradually be ramped up in 4QFY18 while full capacity will be available from Jul’18 onwards. The company will also look to increase prices to offset the impact of strong metal prices (steel, aluminum, etc) and recent JPY appreciation.
The stock is currently trading at FY18/19F P/E of 9.3x/8.3x, a slight premium to benchmark KSE-100, reflecting the strong near-term auto demand and relatively less competition for INDU from new entrants, in our view.

12/03/2018 4 EN

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.

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PK0054501017 Pakistan Stock Exchange Pakistan

Provider

Intermarket Securities Limited

Intermarket Securities Limited (IMS) is a full service corporate brokerage firm based in Karachi, Pakistan. We service both domestic and international clients. IMS was ranked #2 Best Local Brokerage and #3 Best for Overall Country Research for 2016 by AsiaMoney.

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Analysts

Ahmed Raza

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