Indus Motor's profit grows by 56.5% in FY24

Pakistan's Indus Motor Company (INDU) announced a 56.5% growth in profitability in fiscal year 2023-24, mainly due to an increase in volumetric sales in the last quarter.

Arif Habib Limited's Head of Research and Investment Strategy, Tahir Abbas, noted the company recorded 28% growth in volumetric sales in the fourth quarter, which was reflected in higher profits. “Besides, pricing was better compared to last year, resulting in better margins.”

The company announced a net profit of PKR 15.07 billion ($53.8 million) translating into an earning per share of PKR 191.76, up 56.5% from the profit of PKR 9.6 billion in the previous year. INDU also declared final cash dividend of PKR 43 per share, which is in addition to interim dividend of PKR 71.7 per share already paid to the shareholders, according to its filing on the Pakistan Stock Exchange.

For the quarter ended June 30, the company recorded a profit of PKR 5.7 billion, up 48% compared to the same period last year.

The result was in line with industry expectations.

Muhammad Tahir, an analyst at Sherman Securities, noted the company’s gross margin increased to 13%, up nine percentage points during the year. “The improvement in gross margins was mainly due to better margins on the Corolla Cross HEV — thanks to lower taxes on CKD parts — which was introduced in 2024's second half.”

Net sales surged 27% to PKR 54.2 billion in FY24's fourth quarter, driven by an increase in sales which reached 7,069 units compared to 5,512 units in the third quarter.

Other income increased by 68% to PKR 4.2 billion in FY24's fourth quarter. However, for the overall fiscal year, other income totaled PKR 13.7 billion, marking a 4% decline.

Indus Motor Company's board of directors also approved a further investment of PKR 1.1 billion for additional localization of parts and components of various existing vehicles, thereby increasing the total investment in the project for additional localization to PKR 4.1 billion.

The announced investment will be made towards expenditures in plant and machinery, molds, dies, equipment and related expenses for localization of parts. The further investment of PKR 1.1 billion is planned to be completed by first quarter of calendar year 2026.