Karachi, March 13, 2025 – Indus Motor (INDU) conducted its 1HFY25 analyst briefing today, outlining its financial performance and future business strategy.
The company showcased a strong recovery, driven by robust sales growth, localization efforts, and cost optimization measures.
Indus Motor reported a remarkable 14.1% gross margin in 2QFY25, supported by a combination of sustainable cost efficiencies and windfall gains. Key sustainable factors included major cost reductions, localization initiatives, low fixed costs, and the adoption of green energy to reduce utility expenses. Windfall gains stemmed from favorable currency fluctuations, particularly the depreciation of the Japanese Yen, USD, and Thai Baht.
The company highlighted that its passenger cars have achieved 60-65% localization, while its IMV (which includes Toyota and Hilux) has a localization level of 40-45%, attributed mainly to volume differences. Indus Motor currently operates at a single-shift capacity, producing between 38,000 and 45,000 units annually, but has the potential to increase total capacity from 76,000 to 90,000 units with overtime. The management indicated that operations could transition to double shifts within the next 3-6 months if demand continues to grow.
A significant 41% rise in the auto market, encompassing both used and new cars, has contributed to Indus Motor’s growth. Toyota recorded a 74% year-on-year (YoY) increase in volumetric sales, rising from 7,201 units in 1HFY24 to 12,541 units in 1HFY25. Additionally, the imported car segment saw 17,170 units brought into the country during the first half of FY25, with full-year imports expected to exceed last year’s total of 38,561 units.
According to Indus Motor, improved consumer sentiment, greater market confidence, and lower interest rates have played a crucial role in the sector’s recovery. The company expects demand to strengthen further in the coming months, supported by Pakistan’s economic recovery, which is being facilitated by the ongoing IMF program and government reforms.
Indus Motor also emphasized the importance of policy support for the auto sector, particularly in rationalizing CKD taxation, easing financing conditions, and introducing export incentives. Lower duties and interest rates could further stimulate demand, although long-term industry growth will depend on macroeconomic stability.
For 1HFY25, Indus Motor reported a 67% YoY surge in net sales, reaching Rs85 billion. Profit after tax rose to Rs10 billion, driven by higher CKD and CBU sales, lower input costs, and successful cost optimization strategies. Additionally, strong returns on deposits and the well-received Yaris facelift launch further boosted the company’s profitability.
