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

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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Posted on: 2019-02-22T17:16:00+05:00

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