reports
Millat Tractors: 1 director
A director at Millat Tractors bought 25,000 shares at 629.000PKR and the significance rating of the trade was 37/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clea...
- Shahmir Malik
Pakistan Autos - June 2023 - Modest recovery
Auto industry sales volumes displayed a moderate recovery, with a 10% MoM increase to reach 6,034 units. However, there has been a significant decline in sales by 79% YoY basis. The industry faced numerous challenges throughout the year, starting from raw material shortages due to import restrictions, PKR depreciation resulting in cost overruns, and demand destruction caused by rising interest rates and multi-decade high inflation. Consequently, vehicle sales in FY23 witnessed a substantial d...
- Shahmir Malik
Pakistan Autos - May 2023 - Improved PSMC sales lift industry volumes
Sales volumes in the auto industry have experienced a moderate recovery, with a MoM increase of 19% to 5,290 units. However, sales have decreased by a significant 77% YoY. The overall increase in production and sales volumes by PSMC has contributed to the sector's improvement on a MoM basis. Excluding PSMC, industry volumes have declined by 22% compared to the previous month. INDU: In the month of May'23, INDU volumes contracted by 12% MoM and 71% YoY, amounting to 1,718 units. All INDU’s var...
- IMS Research Team
Pakistan Autos : April 2023 Sales volume update
Auto industry volumes plunged in April, declining by 52% MoM to 4,463 units only, following a brief rebound last month. This has further contracted production and sales volumes by 53% and 50%, respectively in 10MFY23. This follows prolonged restriction on import of CKD kits, massive rise in car prices amid PKR depreciation, additional taxation and monetary tightening. INDU: During the month, INDU was able to broadly maintain sales volumes sequentially but the decline is a sharp 56% YoY. Sedan...
- IMS Research Team
Millat Tractors: 3QFY23 Review - Healthy margins and visible cost cont...
Millat Tractors (MTL) has reported a consolidated 3QFY23 NPAT of PKR1.6bn (EPS: PKR12.51), considerably higher than last quarter’s profits of PKR125mn. This takes 9MFY23 NPAT to PKR2.3bn (EPS: PKR17.78), down 54% YoY. The result came in higher than our expected EPS of PKR8.27, where the major deviation stemmed from higher-than-expected gross margins and lower distribution expenses. KEY RESULT HIGHLIGHTS FOR 3QFY23: * Revenue increased by c.2.5x QoQ to PKR17.4bn (in line with our expectations...
- 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...
- IMS Research Team
Pakistan Autos: Mar’23 - Production rebound leads to better volumes
Pakistan auto industry sales rebounded in Mar’23, increasing by 54% MoM to 9,351 units, primarily led by PSMC. However, industry volumes reduced by 66% YoY, amid measures to restrict CKD kits imports, which affected production. Secondly, a massive jump in car prices on the back of PKR devaluation and additional taxes, as well as sharp monetary tightening, have reduced automobile demand significantly. * INDU sales increased by 6%MoM, but were down by 73% YoY. The luxury segment (Fortuner and ...
- IMS Research Team
Pakistan Autos: Feb’23 - Prolonged raw material shortage further reduc...
Pakistan Auto industry sales continued to remain under pressure, declining by 45% MoM and 44% YoY to just 5,762 units in February 2023. This is due to (i) the government’s administrative measures to curb luxury goods imports, (ii) slower demand growth amid elevated interest rates, (iii) lower purchasing power amid multi-decades high inflation, and (iv) sharp hike in local car prices following PKR devaluation and increase in taxes, leading to a contraction in local production and demand. * IN...
- IMS Research Team
Pakistan Autos: Jan 23 - PSMC drags industry volumes to lowest since J...
Pakistan auto industry sales have witnessed a sharp decline of 38% MoM and 39% YoY to 10,431 units in January 2023. The massive reduction in volumetric sales is a reflection of (i) elevated interest rates, (ii) prolonged restriction on import of CKD kits, and (iii) rising inflation and general economic slowdown impacting purchasing power. With production also down by 42% MoM, restricted CKD imports are clearly a huge challenge for the industry, and the sector is likely to be beset by headwind...
- IMS Research Team
Pakistan Autos: Dec 22: Import restrictions continue to hold sway
The difficulties of the Auto sector continued in December as industry sales witnessed a 7% decline MoM and a significant 38% decline YoY. Production was down 10% MoM, a reflection of the recently announced industry closures across the auto sector. The recent sales and production numbers show that import restrictions, depressed demand and PKR depreciation continue to add to the woes of the Auto sector. While the sector will likely remain under pressure due to tight the foreign reserves situati...
- Rahul Hans
Pakistan Strategy - Government announces Agriculture Package
Prime Minister Shahbaz Sharif unveiled an Agriculture Package that aims to subsidize markup of PKR1,800bn worth of agri-loans, higher than PKR1,400bn loan disbursements from last year. The entire package, which is entitled to cost the government PKR600bn (c.0.8% of GDP) also incentivizes fertilizer product prices as well as tractor imports in the country. IMPACT ON FERTILIZER: NEUTRAL TO POSITIVE FOR DEMAND PM has announced various initiatives on fertilizer products to protect farmers from a ...
- 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
Millat Tractors: 1QFY23 Review - Distribution costs hurt earnings
Millat Tractors Ltd (MTL) has reported a consolidated 1QFY23 NPAT of PKR549mn (EPS: PKR4.72), much lower than last year’s EPS of PKR12.47 and last quarter’s EPS of PKR8.22. The result came in lower than our estimated EPS of PKR5.85, where the deviation largely stemmed from lower-than-expected gross margin and higher distribution costs. KEY HIGHLIGHTS * MTL has posted a 27% YoY decrease in sales to PKR7.6bn (in line with estimates). The multiple price hikes towards the end of FY22 cushioned t...
- Abdul Ghani Mianoor
Pakistan Autos – Sep’22 - Volumes continue to dip on production woes
Latest automobile sales figures show a continued downtrend in demand to the tune of 51% YoY (down an additional 6% MoM) to c.10,950 units. This is a similar number to the pandemic lockdown in Jun’20 and is largely attributed to the ongoing production woes. Specifically, the prevailing auto-parts import curtailment measures on CKD units and resultant plant closures during Sep’22 (and in Oct’22td) have led to the decline in production as well to c.9,350 units (down 59% YoY and 27% MoM). Elevate...
- Abdul Ghani Mianoor
Millat Tractors: 4QFY22 review – Earnings miss on lower-than-expected ...
Millat Tractors Ltd (MTL) has reported 4QFY22 NPAT of PKR955mn (EPS: PKR9.86), lower than last year’s EPS of PKR18.16 and last quarter’s EPS of PKR18.21, taking FY22 NPAT to PKR5.9bn (EPS: PKR60.56), down 11% YoY. The result missed our estimated EPS of PKR11.23, where the deviation largely stemmed from lower-than-expected revenues and finance costs. The result was also accompanied with a final payout of PKR20.00/share cash and 20% shares, taking full year payout to PKR51.25/share cash and 60%...
- Abdul Ghani Mianoor
Pakistan Autos: Highest sales slump since May 2020; FY 23 a challengin...
Latest Automobile Industry demand figures indicate a sharp slump of 52% YoY (down 58% MoM) to c.11,900 units; steepest decline since the initial pandemic lockdown in Jun’20, owed to production constraints. Administrative measures to tame auto-part imports, monsoon and Eid holidays led to the decline in production during the month. Although import quotas will gradually ease-off, high interest rates, PKR volatility, price hikes and production constraints will continue to add to the sectors woes...
- Abdul Ghani Mianoor
Pakistan Autos: Jun 2022 result previews – New taxes to further dent ...
* For Jun’22 results, we expect IMS Auto Universe to post combined net profit of PKR1.4bn, down by a sharp c.75% YoY owing to sequentially trimmed margins and imposition of budgetary measures. * On a YoY basis, volumes rose by a strong c.60% on account of preemptive buying in anticipation of price hikes, long delivery lead time owing to production constraints and bookings from relatively low interest rates. Despite the surge in volumes, margins are likely to come off. * The higher ...
- Abdul Ghani Mianoor
Pakistan Autos: Sales volume update
FY22 ENDS ON A HIGH BUT ADMINISTRATIVE MEASURES WILL KEEP DEMAND IN CHECK The automobile industry ended FY22 on a strong note, as sales in Jun’22 more than doubled to c.28,400 units from last year, taking FY22 sales to c.279,000 units, likely due to ramping production before the year-end and uncertainties with regards to the budget . PSMC outshined during Jun’22, more than tripling from last year, followed by INDU. However, the strong sales growth is unlikely to be sustained owing to administ...
- Abdul Ghani Mianoor
Pakistan Autos: May’22 - Dull sales in May despite normal working hour...
* In May 2022, automobile industry sales rose by a sharp 46% yoy (flattish mom) to c 23,000 units. The Economy segment continues to drive the robust yoy growth in industry sales. Thus, 11MFY22 sales clocked in at c 250,000 units (up a strong 50% yoy). Despite normalized working hours in May (following Eid festivities during the first week), volumes remained flattish, likely due to supply chain issues, in our view. * Among INDU models, combined volumes of the Premium segment cars (Fortun...
- Abdul Ghani Mianoor
Pakistan Autos: April’22 - Economy segment cars do well
* In April 2022, Auto industry sales rose by a sharp c.30% yoy but decreased by 18% mom to c.22,000 units. The strong yoy growth is led by the Economy segment. Thus, 10MFY22 sales clocked in at c.228,000 units (up a strong c.50% yoy). Reduced working hours during Ramadan and supply chain constraints likely resulted in the mom decline in sales, in our view. * Among INDU models, combined volumes of the Premium segment cars (Fortuner and Revo), increased by c.60% yoy, while combined Coroll...
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