264 replies to this topic

[Amin Khan]

IMC announces 80 percent dividend
Wednesday, 22 February 2012 17:01

KARACHI: Indus Motors Company (IMC)) has posted a higher profit after tax of Rs 1.766 billion during the half year ending December 31, 2011 and declared a cash dividend of Rs 8 per share.
According to the results despatched to Karachi Stock Exchange (KSE) here Wednesday, pre-tax profit of the company has surged to Rs 2.604 billion against Rs 1.429 billion in 2010.
Similarly, as earning per share also improved to Rs 22.48 compared to Rs 11.55 last year.
Company's net sales jumped to Rs 32.999 billion during the period under review as

[Amin Khan]

Indus : Downgrading to Neutral post 1H results

Indus Motors announced 1HFY12 earnings of PRs22.5/sh, up 95% YoY; though 5% below our estimates, primarily due to lower markup income in 2Q. Interim payout of PRs8/sh was also lower than our estimates of PRs10/sh.

During 1H, Indus raised its selling prices more than cost-side pressures which combined with improved localization and better margins on bigger vehicles helped lift EBITDA margin by 259bp to 7.7%.

Now that the 1HFY12 results are behind us and the stock has performed by 12% in 1M, we downgrade Indus to Neutral though retain our PO and earnings estimates. We expect Indus's 2HFY12 EPS to stagnate HoH on heightened FX risk and soft volumes growth.

Having said that, we believe attractive multiples where Indus is trading at FY12E P/E of 5.2x and offers 9.2% D/Y should limit downside, in our view.
(KASB)

[Lion Heart]

FINANCIAL RESULT FOR THE FIRST QUARTER ENDED 30/09/2011
PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 1,407.326
PROFIT/LOSS AFTER TAXATION RS. IN MILLION 937.484
EPS = 11.93


FINANCIAL RESULT FOR THE HALF YEAR ENDED 31/12/2011
PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 2,604.060
PROFIT/LOSS AFTER TAXATION RS. IN MILLION 1,766.624
EPS = 22.48
DIVIDEND = 80%(i)
BOOK CLOSURE FROM 16/03/2012
BOOK CLOSURE TO 24/03/2012

[Amin Khan]

Indus Motor enhanced 1HFY12 profitability.......HOLD
Indus Motors (INDU) rides on better sales i.e. 6% increase in sales from last year. The number of units sold till December 31, 2011 was 24,341 units as against 22,903 units in December 31, 2010.

INDU’s combined sales revenue for CKD, CBU and parts business amounted to Rs 33bn and hence profit after tax stood at Rs 1.77 bn on account of increased sales volume and cost efficiencies. The company's EPS increased to Rs 22.48 in the period against Rs 11.55 reported in the same period a year back.

INDU has passed on an interim cash dividend of Rs 8/share. INDU yields FY12 PE of 5.3x as against auto assembler’s such as Pak Suzuki (PSMC) future PE of 5.5x and hence we can only recommend ‘HOLD’ in INDU.

Auto industry trying to ward of tough situation
Some of the issues highlighted by the company include general economic problems such as

• severe supply disruption due to Thai floods;
  
• steep rupee devaluation;
  
• increased cost pressures due to energy shortages; and
  
• influx of used cars.

Going forward
INDU being one of the premier assembler may ward of challenges to auto players in the country such as appreciating YEN against beleaguered rupee and resultant cost pressures, expiry of AIDP, correction in commodity prices which may influence rural buying, impact of ban on CNG cylinders given lack of gas in the country and thus decline in conversion kits imports and influx of imported used cars.

INDU is riding on better operational efficiencies to counter these challenges and thus maintaining pace of production numbers as against Atlas Honda which is still incurring loss.
(SCS)

[Amin Khan]

Company Update - INDU

Innovation in product base, outlook maintained
In an analyst briefing held recently, the management highlighted that sales in the short-term could be affected from decline in crop price, cotton particularly. In addition, floods in Thailand had earlier resulted in a cautious stance for the supply of parts; however, the issue largely remains neutral for the company. Moreover, ban on CNG kits will also negatively affect the sales in the economy segment and newly introduced Xli and Gli with CNG options.

Volumes, prices augments topline
Topline went up by 23% to PKR 33.00bn in 1H FY12, marginally deviating from our expectation of PKR 33.19bn. The growth in topline can be attributed to higher car sales by 7% YoY along with increase in car prices by an average of 7% YoY in 1H FY12. Moreover, higher Corolla and Hilux sales as compared to last year further proved to improve topline during the period under review. During 1H FY12, auto sector managed to bank on higher sales on account of backlog of orders, as consumers deferred purchases after a cut in GST and SED was announced in Jun11. Moreover, addition of new models - Shifting 1.8L to 1.6L, introduction of Automatic 1.6L Gli and CNG variants of Xli and Gli- in INDU’s portfolio also helped in increasing its sales during the period under review.

Higher other income offsets opex
Other income went up by 25% to PKR 947mn in 1H FY12, which we believe is mainly supported by higher advances from customers and increased investments in government bills and mutual funds. The growth in other income also helped in offsetting the impact from increase in opex charges, which grew by 25% to PKR 775mn in 1H FY12. Moreover, tax benefits from investment in marketable securities helped in lowering ETR to 32.2% from 36.5% last year.

Valuation
At current levels INDU is trading at a 6% discount to our Jun12 target price of PKR 255/share and we recommend ‘HOLD’ on the scrip. INDU is currently trading at a forward PE multiple of 5.88x and offers a forward dividend yield of 6%, based on FY12 forecasted EPS of PKR 40.81.
(GLOBAL)

[Amin Khan]

INDU : Analyst Briefing Notes

Indus Motor Company (INDU) conducted its Analyst Briefing yesterday to discuss the company’s performance in 1HFY12 and future outlook

Though the pricing power still remains with the local assemblers, GoP’s continuous efforts to bring down the prices by measures like increasing used car limits may pose a threat going forward

Indus has not yet decided to launch any replacement in the 800cc segment post shutting down Cuore. This would take the company out of this segment for medium term

INDU currently has standing inventory of some CNG kits while lacks cylinders. The kits may have to be written off causing a one time loss if ban on cylinders imports persists

We continue to have an Underweight stance on the sector with REDUCE on INDU. Our DCF based Dec12 TP for the company stands at PKR205/share reflecting a downside of 15% from the last closing price
(BMA)