Indus Motor Company Records Significant Profit Increase in Third Quarter FY24

Karachi, Indus Motor Company Limited (INDU) has announced a notable rise in profitability for the third quarter of fiscal year 2024, posting a profit after tax (PAT) of PKR 4.4 billion, a significant increase from PKR 1.7 billion in the previous quarter.

According to AKD Securities Limited, the substantial profit increase, which exceeded both market and analytical forecasts, was primarily fueled by unexpectedly high gross margins. The reported gross margins of 14.7% sharply contrasted with the anticipated 8.5%, propelling the company’s earnings per share (EPS) to PKR 56.6 from PKR 22.2 in the preceding quarter.

Revenue for the quarter surged to PKR 47.3 billion, up from PKR 18.2 billion in 2QFY24, representing a 159% increase. This growth was driven largely by a 2.4 times increase in sales volumes, with unit sales rising to 6,503 from 2,687. The significant sales boost was attributed to the new-year effect and the successful launch of the Corolla Cross.

Gross margins improved substantially from 7.8% in the previous quarter to 14.7%, benefiting from a stable exchange rate and higher margins associated with the newly launched Corolla Cross. However, operating expenses also escalated by 147% due to the increase in sales volumes.

Other income for the company rose by 64% to PKR 4.1 billion, up from PKR 2.5 billion in the previous quarter, which was likely influenced by higher short-term investments following an increase in customer advances.

Furthermore, the company declared an interim cash dividend of PKR 34.0 per share, consistent with its historical payout ratio of 60%, resulting in a 9-month FY24 payout of PKR 71.7 per share, marking a 68% increase year-over-year.

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