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INDU_9MFY13 Result Review (AKD Off the Analyst's Desk: April 18, 2013)




AKD Securities Limited


18 Apr 2013





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Indus Motor Company (INDU) has announced its financial result for 9MFY13 where NPAT came in at PkR1,730mn (EPS: PKR22.01) vs. NPAT of PkR2,894mn (EPS: PkR36.82) in 9MFY12, translating into a decline of 40%YoY. This was below our expected 9MFY13 NPAT of PkR1,851mn (EPS: PkR23.54). Alongside the result, the company announced a surprise interim dividend of PkR4/share, bringing FYTD dividend to PkR10/share. Key highlights for 9MFY13 result include 1) 21%YoY decline in topline on account of lower sales volumes (-34%YoY), 2) a 69bps YoY decline in GMs to 7.21% mainly due to ~20% increase in cost per unit and ~19% increase in AUP and 3) 46%YoY decline in ‘other income’ primarily due to lower advance payments received from customers. On a sequential basis, INDU posted NPAT of PkR752mn (EPS: PkR9.57) in 3QFY13 vs. NPAT of PkR287mn (EPS: PkR3.65) in 2QFY13, denoting a growth of 2.6xQoQ. Topline in 3QFY13 was up by 70%QoQ due to 74%QoQ increase in the sales volumes to 11,130 units supported by 228 units of the newly launched Fortuner. Gross Margins clocked in at 7.21% in 3QFY13, up by 170bps QoQ mainly on account of a weaker yen, in our view. We are in the process of re-visiting our investment case for INDU and will update investors shortly.

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