Earnings Preview: Indus Motors to post profit decline despite higher sales

MG News | February 22, 2019 at 05:16 PM GMT+05:00

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February 22, 2019 (MLN): The Board meeting of Indus Motors Company Limited (INDU) is scheduled to take place on Monday, February 25, 2019 to review and announce the company’s financial results for the period ended on December 31, 2018.

Based on estimations from various research houses, the market expects INDU’s profit after tax for 1HFY19 to be clocked in between Rs 2.86 billion to Rs 2.9 billion, while in 2QFY19, the company is likely to post a profit in between Rs 1.3 billion to Rs 1.32 billion with EPS ranging from Rs 12.8 to Rs 13.3.

This suggests that the company’s expected earnings in 1HFY19 is expected to increase, while the company’s year-on-year earnings this quarter is likely to decline.

The estimate projections by various brokerage houses are shown in the table below:

Brokerage House	2QFY19	EPS (% Change over year)	1HFY19	EPS (% Change over year)
Arif Habib Ltd	Rs.3.5 billion	Rs.45.05 (-5%)	Rs.7.05 billion	Rs.89.68 (-4%)
JS Securities	Rs.3.72 billion	Rs.47.38 (-0.3%)	Rs.7.2 billion	Rs.92.02 (-1.8%)
BIPL Securities	Rs.3.48 billion	Rs.44.2 (-6.9%)	Rs.6.98 billion	Rs.88.9 (-5.2%)
Taurus Securities	Rs.3.2 billion	Rs.40.43 (-15%)	Rs.6.7 billion	Rs.85.06 (-9%)
Intermarket Securities	Rs.3.2 billion	Rs.40.96 (-14%)	-	Rs.85.59 (-9%)
Insight Securities	-	Rs.39.6 (-17%)	-	-

The decline in earnings can be accredited to hefty PKR depreciation and declining ability to pass on the cost pressure.

Whereas on quarterly basis, the decline can be linked to higher input costs and 12.4%YoY decline in other-income owing to shrinking size of advances from customers.

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