INDU: On road to profit

April 26, 2022 (MLN): Automaker, Indus Motors Company Limited (INDU) on Tuesday has reported net profits of Rs15.29 billion during 9MFY22, up by a whopping 81.72% YoY against Rs8.42bn net profits in the same period last year, mainly on the back of higher CKD and CBU sales volume and an increase in other income due to higher fund size on account of increase in customer advances.

This has translated into earnings per share (EPS) of Rs194.56 in 9MFY22, 81.7% higher than the EPS of Rs107.07 recorded in SPLY.

The financial result was accompanied by a third cash dividend for the quarter at Rs26 per share i.e., 260%. This is in addition to the interim cash dividend of Rs64.5 per share i.e., 645% already paid.

During the period under review, the top line witnessed a 55% increase to Rs203bn owing to volumetric growth while the cost of sales jumped by 54% YoY on the back of increasing commodity prices for steel, and plastic, etc. in the international market. In addition, the continuous depreciation of PKR against the USD also hit the cost of sales during the period.

However, the higher volumetric sales outweighed the impact of the higher cost which led the gross margins to expand from 8.2% to 8.6%.

On the expense side, INDU’s distribution expenses went up by 29% YoY to Rs1.24bn. Meanwhile, the admin cost surged by 43% during the period under review.

Notably, the company posted a 98.6% YoY rise in other income amidst an increase in cash balance owing to higher sales and short-term investments.

On the tax front, the effective tax rate improved to 28% as compared to 29% in 9MFY21.

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