Indus Motor declares 76% fall in net profit during 1QFY23

Indus Motor declares 76% fall in net profit during 1QFY23

Indus Motor Company Limited (INDU) has declared massive fall of 76 per cent in its net profit during first quarter (July – September) of the fiscal year 2022/2023.

According to financial results submitted to Pakistan Stock Exchange (PSX) on Thursday, the company declared after tax profit at Rs1.29 billion for the quarter ended September 30, 2022 as compared with Rs5.42 billion in the corresponding quarter of the last fiscal year.

Indus Motor, which is maker of Toyota Motors in Pakistan, also announced earnings per share t Rs16.50 for the first quarter of the current fiscal year as compared with the EPS of Rs69.02 in the same quarter of the last year.

Board of directors of the company met on October 26, 2022 and announced first interim cash dividend for the quarter ended September 30, 2022 at Rs8.20 per share i.e. 82 per cent.

Analysts at Ismail Iqbal Securities said that topline of the company arrived in at Rs37.3 billion against the estimates of Rs42.9 billion, down 48 per cent and 43 per cent on Quarter on Quarter (QoQ) and Year on Year (YoY) respectively, primarily as result of 51 per cent and 52 per cent QoQ and YoY decline in car sales volumes.

The deviation in revenue could be due to rise in compensation on advances from customers and car prices revisions yet to reflect as cars might have been sold at March 2022 and April 2022 prices during the quarter.

Gross margins fall to lower ever levels of 6.3 per cent on account of depreciation of Pakistani Rupee (PKR) against the US dollar and lag price hike that is yet to reflect, according to the analysts.

Elevated deposit rates resulted in other income clocking in at Rs5.16 billion fell one per cent QoQ, despite likely fall in advances. Effective tax rate clocked in at 29.5 per cent against 88.1 per cent recorded in the last quarter.