Indus Motors Company (INDU): 4QFY19 EPS Rs43.9, down 16% YoY; FY19 EPS Rs174.5, down 13% YoY
- Indus Motor Company Limited (INDU) posted 16% YoY decline in its 4QFY19 earnings, reporting EPS of Rs43.9 which is above our expectations mainly due to lower effective tax rate charged in 4QFY19.
- Company has also declared DPS of Rs27.50/share in addition to DPS of PKR87.50/share already paid during the year, taking total DPS of FY19 up to Rs115/share.
- The significant decline recorded in earnings is due to depletion in gross margin by 7ppts owing to US$ appreciation against rupee by 14% in 4QFY19 and inflationary environment.
- In 4QFY19, revenues declined by 4% QoQ mainly on back of lower volumetric sales 15,833 units vs. 16,935 units in 3QFY19. Sales have been impacted negatively due to continuous hike in prices (5-20%) in 4QFY19.
- Effective tax rate is down by 13ppts to 17% vs. 30% in previous quarter. We await for clarity from the management on this front.
- Key risks to company includes 1) Further PKR depreciation, 2) slowdown in economy and 3) Adverse regulatory changes.
Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.
Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.
Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.
JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).
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