reports
- IMS Research Team
Al Ghazi Tractors: 1QCY23 Review - Strong Other Income supports profit...
Al-Ghazi Tractors (AGTL) has reported 1QCY23 NPAT of PKR230mn (EPS: PKR3.96), down a sharp 80% YoY, but much better compared to a loss of PKR27mn (LPS: PKR0.47) in the last quarter. The result beat our expected EPS of PKR2.51, where the major deviation stemmed from higher-than-expected other income. KEY HIGHLIGHTS FOR 1QCY23: * Net revenues clocked in at PKR4.2bn, up a sharp 2.3x QoQ (but down 52% YoY). The sequential growth in revenue is due to increase in volumes and prices. We expected a ...
- IMS Research Team
Tractors Mar’23 Result Preview: Demand uptick and price hikes to impro...
* IMS Tractor Universe is expected to post NPAT of PKR1.2bn in the Mar’23 quarter, down 80% YoY but up 11.3x QoQ. Sequential improvement in profits is a combination of proactive price increases undertaken by AGTL and MTL to protect margins and a massive surge in volumes during the quarter. * The tractor OEM’s superior localization figures, relative to the automobile OEMs, will help protect margins despite rising inflationary pressures. However, it is important to note that even the trac...
- Abdul Ghani Mianoor
Pakistan Tractors: Headwinds to dampen growth; maintain Marketweight
* We retain our Marketweight stance on Pakistan Tractors despite multiple headwinds in the form of margin attrition and sluggish demand outlook in FY23-24f, amid potential contraction in farm economics from recent floods. * IMS Tractor Universe has recently witnessed a steep decline in gross margins owing to higher input costs and sluggish demand. Margins may further deplete if the government decides to increase GST to 17% in order to fulfill revenue targets (seems difficult in election...
- Abdul Ghani Mianoor
Al Ghazi Tractors: 3QCY22 Review - Sharp attrition in margins
Al-Ghazi Tractors (AGTL) has reported 3QCY22 NPAT of PKR0.3bn (EPS: PKR4.36), down a sharp 70% YoY and 67% QoQ. This takes 9MCY22 NPAT to PKR2.2bn (EPS: PKR37.67), flat YoY. The result is significantly lower than our expected EPS of PKR10.89, where the deviation has largely stemmed from lower-than-expected gross margin of just 8% vs. 25% in the same period last year. KEY RESULT HIGHLIGHTS FOR 3QCY22: * Net revenue has clocked in at PKR6.5bn, up 17% YoY, in line with our expectations. This is...
- Abdul Ghani Mianoor
Al Ghazi Tractors: 2QCY22 Review - Lower margins lead to earnings miss
Al-Ghazi Tractors (AGTL) has reported 2QCY22 NPAT of PKR0.8bn (EPS: PKR13.31), up a 12% YoY, but sequentially down by 33%. This takes 1HCY22 NPAT to PKR1.9bn (EPS: PKR33.31), up 40% YoY. The result is significantly lower than our expected EPS of PKR19.00, where the deviation has largely stemmed from lower-than-expected gross margin. KEY RESULT HIGHLIGHTS FOR 2QCY22: * Net revenue has clocked in at PKR11.2bn, slightly lower than our expectations, but doubled compared to the previous year. Thi...
- Abdul Ghani Mianoor
Al Ghazi Tractors: 1QCY22 review – stellar earnings continue; earnings...
Al-Ghazi Tractors (AGTL) has reported 1QCY22 NPAT of PKR1.2bn (EPS: PKR19.99), up a sharp 67% yoy and 56% qoq (highest quarterly earnings since 2015). The result is much higher than our expected 1QCY22 EPS of PKR16.09, where the deviation has stemmed largely from higher-than-expected gross margins. KEY HIGHLIGHTS FOR 1QCY22: * Net revenues of PKR8.7bn, slightly higher than our expectations, up a strong 72% yoy and 61% qoq. This is largely attributed to the 37% yoy rise in volumes to 6,563 un...
- Abdul Ghani Mianoor
Al Ghazi Tractors: 4QCY21 review – earnings miss but strong DPS boosts...
Al-Ghazi Tractors (AGTL) has reported 4QCY21 NPAT of PKR743mn (EPS: PKR12.82), up a sharp c.60% yoy but down c.10% qoq. This takes CY21 EPS to PKR51.03, more than doubling yoy from an EPS of PKR23.28 in CY20. The result is slightly lower than our expected 4QCY21 EPS of PKR13.87, where the deviation has stemmed largely from lower-than-expected gross margins. AGTL announced a final DPS of PKR51.03, greater than our expected DPS of PKR47. KEY HIGHLIGHTS FOR 4QCY21: * Net revenues of PKR5.4bn, b...
- Abdul Ghani Mianoor
Pakistan Tractors: Downgrade to Neutral as profitability will moderate
We downgrade our stance on both Tractor stocks from Buy to Neutral, as margins are expected to remain under pressure amid elevated commodity prices, `expected decline in wheat and other crops in FY23. In light of present macroeconomic scenario, we now assume slower industry sales dragged by multiple price hikes, looming water shortage before the Kharif crop season, low fertilizer inventory and threat of GST hike in the FY23 Budget (without an offsetting subsidy for farmers). The average FY23f...
- Abdul Ghani Mianoor
Pakistan Tractors: Upgrade estimates upon clarity on GST; Buy
We upgrade our stance on both Tractor stocks from Neutral to Buy, upon certainty that the government will maintain GST on tractors at 5%. We had previously downgraded our estimates in anticipation of a GST hike in the mini-budget, which has historically been a big dampener for sales. Robust farmer income amid elevated global commodity prices and expectations of bumper yields of major crops reaffirm our liking for the sector. Also, renewed govt. focus on the agri-sector ahead of elections shou...
- Abdul Ghani Mianoor
Al Ghazi Tractors: 3QCY21 Review - Higher-than-expected gross margins ...
Al-Ghazi Tractors (AGTL) has reported 3QCY21 NPAT of PKR835mn (EPS: PKR14.40), up a sharp c.20% qoq and c.85% yoy. This takes 9MCY21 EPS to PKR38.21, up c.2.5x yoy from PKR15.34. The result is better than our expected EPS of PKR12.90, where the deviation has stemmed largely from higher-than-expected gross margins. Key Highlights for 3QCY21: * Net revenues of PKR5.6bn, broadly in line with our expectations, up c.20% qoq amid a c.15% qoq increase in volumes to c.4,800 units from c.4,100 units ...
- Abdul Ghani Mianoor
Al Ghazi Tractors: 2QCY21 review – greater operational efficiencies le...
Al-Ghazi Tractors (AGTL) has reported 2QCY21 NPAT of PKR687mn (EPS: PKR11.86), flat qoq while up c.2.5x yoy, from a NPAT of PKR270mn (EPS: PKR4.65). This took 1HCY21 EPS to PKR23.81, up c.3x yoy. The result is better than our expected EPS of PKR9.14, where the deviation has largely stemmed from lower-than-expected Opex. AGTL skipped a payout, against our expectations of PKR15/sh, where we assume a change in payout policy (annual instead of half-yearly, the same as last year). KEY HIGHLIGHTS F...
- Abdul Ghani Mianoor
Al Ghazi Tractors: 4QCY20 review – Strong gross margins lead to earnin...
Al-Ghazi Tractors (AGTL) reported 4QCY20 NPAT PKR461mn (EPS: PKR7.95), compared with a net loss of PKR311mn (LPS: PKR5.37) SPLY, while up 2% qoq. This took CY20 NPAT to PKR1.4bn, up a sharp 41% yoy. The result is better than our expected 4Q EPS of PKR6.10, where the deviation largely stemmed from higher-than-expected gross margins. AGTL announced a final DPS of PKR21.39, higher than our estimate of PKR16.0. This is the only payout for the year, as the company skipped payouts earlier, potentia...
- Abdul Ghani Mianoor
Pakistan Autos: Industry sales dragged by the premium car segment
In December 2020, the Auto industry sales witnessed a 4% mom decline (while up 15% yoy) to 13,956 units, largely attributed to a slowdown in Premium segment sales (INDU and HCAR) which fell c.20% mom, respectively. This took CY20 industry sales to c.124,000 units, down 34% yoy. PSMC sales, however, witnessed a 12% mom rise in December, amid a lift in Cultus and Alto sales. INDU sold 1,795 / 1,440 units of Corolla / Yaris, with the combined sales falling 20% mom, due to the sharp 38% mom fall ...
- Abdul Ghani Mianoor
Pakistan Autos: Higher demand for LCVs drive overall industry sales gr...
In November 2020, the Auto industry sales witnessed 3% mom growth (up 48% yoy) to 14,533 units, largely attributed to the rise in the Pickup segment sales, which rose by 39% mom. For the Auto OEMs, PSMC witnessed a 12% mom rise in sales (16% yoy), while INDU dragged the industry’s growth due to the 10% mom decline (fall in Yaris sales). This takes 5MFY21 industry sales to 65,998 units, up 19% yoy. INDU sold 1,704 units / 2,338 units of Corolla / Yaris, down a combined 8% mom, due to the sharp...
- Abdul Ghani Mianoor
Al Ghazi Tractors: CY 19 analyst briefing takeaways
AGTL posted CY19 NPAT of PKR978mn (EPS: PKR16.87), down 60% yoy, which was led by a 6ppt decline in gross margins to c.18% and higher finance costs (up 3.2x yoy). During 4QCY19, however, the company posted a net loss of PKR311mn (LPS: PKR5.37). During 9MCY20, AGTL posted a NPAT of PKR889mn (EPS: PKR15.34), down 31% yoy from SPLY. Key highlights for CY 19: * The company sold 15,719 units during CY19, which were down 34% yoy. Total industry sales during the year fell by 35% yoy to 41,156 units...
- Abdul Ghani Mianoor
Pakistan tractor sales stage a strong rebound; upgrade estimates
Tractors sales have seen a strong rebound ever since the announcement of the agriculture package in May – up 24% yoy during 4MFY21 to c15,500 units. We believe factors for the turnaround will persist near-term, and hence we lift our FY21f industry sales forecast by 22% to c45,000 units. The recent approval of sales tax subsidy of PKR1.5bn (reduction of GST on tractors from 5% to 0%) will maintain the momentum, in our view. The present conditions are reminiscent of FY17-18, when industry sales...
- Abdul Ghani Mianoor
Al Ghazi Tractors: 3QCY20 review – Strong gross margins lead to earnin...
Al-Ghazi Tractors (AGTL) reported 3QCY20 NPAT of PKR453mn (EPS: PKR7.82), compared to a profit of PKR327mn (EPS: PKR5.64) in the same period last year and a profit of PKR270mn (EPS: PKR4.65) last quarter. The result is better than our expected EPS of PKR6.35. This takes 9MCY20 NPAT to PKR889mn (EPS: PKR15.34), vs. PKR1.3bn (EPS: PKR22.24) in SPLY. AGTL did not announce any dividends this quarter. 3QCY20 REVIEW HIGHLIGHTS: * Net revenues of PK3.5bn, broadly in line with our expectations, down...
- Abdul Ghani Mianoor
Al Ghazi Tractors: 2QCY20 review – In-line with expectations
Al-Ghazi Tractors (AGTL) reported 2QCY20 NPAT PKR270mn (EPS: PKR4.65), compared to a profit of PKR396mn (EPS: PKR6.84) in the same period last year and a profit of PKR166mn (EPS: PKR2.86) last quarter. The result is broadly in-line with our expected EPS of PKR4.44. This takes 1HCY20 NPAT to PKR436mn (EPS: PKR7.51). AGTL, however, did not announce any dividends for the quarter against our estimate of PKR5.0/sh. 2QCY20 HIGHLIGHTS: Net revenues of PK3.0bn, down 19%yoy (up 13% qoq) due to a 25% y...
- Abdul Ghani Mianoor
Pakistan government approves GST reduction on tractors; big catalyst f...
The government has approved the subsidy on tractors amounting to PKR1.5bn, which was announced in May as part of the PKR50bn Agriculture support package. As a result, the GST on tractors is being reduced from 5% presently to 0% for one year (FY21). The government has also approved a PKR6.8bn subsidy on mark-up on Agri-loans. We expect demand for tractors to rebound strongly due to the reduction in GST and other measures to support farmer income. Measures of the Agriculture Package similar to ...
- Abdul Ghani Mianoor
Al Ghazi Tractors: Q1 CY 20 review – Better-than-expected gross marg...
Al-Ghazi Tractors (AGTL) reported 1QCY20 NPAT PKR166mn (EPS: PKR2.86), compared to a profit of PKR566mn (EPS: PKR9.76) in the same period last year and a net loss of PKR311mn (LPS: PKR5.37) in 4QCY19. This is significantly better than our expected LPS of PKR1.08. Major surprise was a gross profit PKR497mn potentially due to better pass-on of cost pressures to customers. AGTL did not announce any dividends for the quarter. We have a Sell recommendation on the stock with a TP of PKR347. Key hig...
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