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Toshi

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INDU -- Indus Motor
« Reply #-1 on: October 10, 2008, 01:32:02 PM »
All About Indus Motor
« Last Edit: January 28, 2012, 09:04:25 PM by M&M »

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INDU -- Indus Motor
« Reply #-1 on: October 10, 2008, 01:32:02 PM »

Toshi

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Re: INDU -- Indus Motor
« on: September 14, 2009, 09:43:02 PM »
Date: 09/14/2009 
Symbol Code: INDU  Company Name: INDUS MOTORS COMPANY LIMITED 
Profit/Loss: (N/A)  Amount: (N/A) 
Before/After Tax: After  Half/Full Year: Full Year  Period: 06/30/2009 
Dividend: (N/A) %  Bonus Shares: (N/A) %  Right Shares: (N/A) %
AGM Date: (N/A)  Book Closure From: (N/A) 
Book Closure To: (N/A)  Board Meeting Date: 09/29/2009 
General Info: Board meeting at 10:00 a.m. 

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Re: INDU -- Indus Motor
« Reply #1 on: September 29, 2009, 11:31:08 AM »
Indus: FY09 earnings likely to decline by 50%YoY
 

September 28, 2009 (JS Research)

 

(PDF report is also attached)

 

Indus Motor Company (INDU) is expected to announce full year FY09 results tomorrow. We expect the company to report earnings of Rs1.1bn (EPS of Rs14.56) versus profit of Rs2.3bn (EPS of Rs29.15) last year, depicting a decline of 50%YoY.  Though car assemblers have increased car prices, the price hike was not sufficient to fully offset the declining volumetric sales (down 29%YoY) and inflated cost of production (COGS/car up 42%YoY) during the year.   

 

However on the flip side, with improved sales and healthier margins, profitability in 4QFY09 is expected to increase by 43%QoQ. We expect the company to announce final cash dividend of Rs4-5 per share while not ruling out a possibility of a bonus issue.  Trading at FY09E P/E of 11.7x, we currently have a ‘Sell’ recommendation on the scrip.

 

Sales down 3%, profits down 50%YoY

INDU in full year FY09 results is expected to post earnings of Rs1.1bn (EPS of Rs14.56), compared to profits of Rs2.3bn (EPS of Rs29.15) last year, down 50%YoY. Though car prices on average increased by 35%, inflated cost of production amid rupee depreciation (20%YoY) and higher realized steel prices dragged earnings down for the company. Net sales are expected to arrive at Rs40.2bn, down only 3%.  Cost of sales/car is expected to surge by 42%YoY with COGS rising to Rs38bn in FY09. Hence, gross profits are set to decline by 44% with gross margins falling by 388bps to 5.4%.

 

Moreover, other income which is another major source of proceeds for the company is also likely to reduce by 27%YoY. Furthermore, higher administrative and distribution expenses (up 6%YoY) along with increase in financial charges are likely to dampen earnings for the company further.

 

43%QoQ growth expected in 4QFY09

In 4QFY09, INDU is expected to post profits of Rs578mn (EPS of Rs7.36) as against earnings of Rs403mn (EPS of Rs5.13) in 3QFY09, up 43%QoQ. Rise in volumetric sales (up 19%QoQ) is the key driver behind the boost in profitability as net sales for the quarter is up 48%QoQ. It is worth mentioning that it will be the third consecutive QoQ jump in earnings for the company.



Recommendation: ‘Sell’

With car sales posting six continuous month-on-month rise, recovery in the sector is inevitable. However for recovery, we believe, monetary easing is the key factor. Persistent yen appreciation and rise in steel prices remain a cause of concern for the industry. We believe, improving sector fundamentals are already priced in with INDU trading at FY09E P/E of 11.7x and 21% above our target price of Rs140. Hence, we have a ‘Sell’ recommendation for the scrip.


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Re: INDU -- Indus Motor
« Reply #2 on: September 29, 2009, 02:43:49 PM »
29-SEP-09 INDU Indus Motor FINANCIAL RESULT FOR THE YEAR ENDED 30/06/2OO9
29-SEP-09 INDU Indus Motor DIVIDEND = 100%(F)
29-SEP-09 INDU Indus Motor PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 2,046.013
29-SEP-09 INDU Indus Motor PROFIT/LOSS AFTER TAXATION RS. IN MILLION 1,385.102
29-SEP-09 INDU Indus Motor EPS = 17.62
29-SEP-09 INDU Indus Motor ANNUAL GENERAL MEETING WILL BE HELD ON 28/10/2OO9
29-SEP-09 INDU Indus Motor BOOK CLOSURE FROM 22/10/2009
29-SEP-09 INDU Indus Motor BOOK CLOSURE TO 28/10/2009

Toshi

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Re: INDU -- Indus Motor
« Reply #3 on: September 29, 2009, 06:35:12 PM »
29-SEP-09 INDU Indus Motor FINANCIAL RESULT FOR THE YEAR ENDED 30/06/2OO9
29-SEP-09 INDU Indus Motor DIVIDEND = 100%(F)
29-SEP-09 INDU Indus Motor PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 2,046.013
29-SEP-09 INDU Indus Motor PROFIT/LOSS AFTER TAXATION RS. IN MILLION 1,385.102
29-SEP-09 INDU Indus Motor EPS = 17.62
29-SEP-09 INDU Indus Motor ANNUAL GENERAL MEETING WILL BE HELD ON 28/10/2OO9
29-SEP-09 INDU Indus Motor BOOK CLOSURE FROM 22/10/2009
29-SEP-09 INDU Indus Motor BOOK CLOSURE TO 28/10/2009

Nice payout

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Re: INDU -- Indus Motor
« Reply #4 on: October 05, 2009, 11:57:32 AM »
INDU: Cautiously optimistic – reiterate Buy
 We are revising upwards Indus’s FY10-11E EPS estimates by 12.4-17.5% and rolling
forward our DCF based PO to Rs218/sh (from PRs169/sh).
Our upgrade comes following stronger than expected FY09 results and optimistic
sales guidance by Indus. In the post-results analyst briefing, Indus motors showed
optimism on domestic demand revival while they were cautious of recent Rupee
devaluation and any changes in tariff plans.
The company expects Corolla sales, (38k, +41% YoY) to spearhead unit sales
growth of 31% in FY10E.
 We believe continuing volatility in FX will remain the key concern for Indus’s
financial performance in FY10E.
 At PRs183/sh, Indus is trading at FY10E P/E of 6.5x, a 16% discount to our implied
multiple of 7.7x. We reiterate Buy with upside of 19% from current market price.
« Last Edit: October 05, 2009, 12:24:02 PM by Farzooq Haider »

Offline Asim

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Re: INDU -- Indus Motor
« Reply #5 on: October 05, 2009, 12:13:02 PM »
why you are placing sad icon with + news   :)

Toshi

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Re: INDU -- Indus Motor
« Reply #6 on: October 06, 2009, 12:42:17 PM »
Good show by INDUS.

Toshi

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Re: INDU -- Indus Motor
« Reply #7 on: October 06, 2009, 03:45:06 PM »
Finally closed on upper lock

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Re: INDU -- Indus Motor
« Reply #8 on: October 26, 2009, 04:52:39 PM »
Indus Motor Company – 1QFY10 Earnings Preview
Indus Motor Company Limited (INDU) is scheduled to announce 1QFY10 results on October 28,
2009. We expect the company to post profit after tax of PKR482mn (EPS: PKR6.14), up 906%
YoY compared to the profit after tax of PKR48mn (EPS: PKR0.61) in the corresponding period of
last year. Higher earnings expectation during 1QFY10 is on the back of volumetric growth and
jump in cash balances.

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Re: INDU -- Indus Motor
« Reply #9 on: October 28, 2009, 12:32:02 PM »
eps 9.66

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Re: INDU -- Indus Motor
« Reply #10 on: October 28, 2009, 01:19:14 PM »
eps 9.66

28-OCT-09 INDU Indus Motor XD FINANCIAL RESULT FOR THE FIRST QUARTER ENDED 30/09/2009
28-OCT-09 INDU Indus Motor XD PROFIT/LOSS BEFORE TAXATION RS. IN MILLION 1,167.101
28-OCT-09 INDU Indus Motor XD PROFIT/LOSS AFTER TAXATION RS. IN MILLION 759.165
28-OCT-09 INDU Indus Motor XD EPS = 9.66

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Re: INDU -- Indus Motor
« Reply #11 on: October 28, 2009, 08:21:34 PM »
INDU main ag mall pehnia gia ?

Toshi

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Re: INDU -- Indus Motor
« Reply #12 on: October 28, 2009, 09:45:01 PM »

Toshi

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Re: INDU -- Indus Motor
« Reply #13 on: October 31, 2009, 11:02:34 PM »
 INDUS MOTORS - Analysis of Financial Statements  
OVERVIEW (October 30 2009): Indus Motor Company Limited was incorporated in Pakistan as a public limited company in December 1989 and started commercial production in May 1993. The shares of the company are quoted at all the stock exchanges of Pakistan.

The company was formed in accordance with the terms of a Joint Venture agreement concluded amongst the House of Habib, Toyota Motor Corporation and Toyota Tsusho Corporation for the purpose of assembling, progressive manufacturing and marketing of the Toyota vehicles.

The company also acts as the sole distributor of the Toyota vehicles in Pakistan. The Company is also the sole distributor of DAIHATSU vehicles in Pakistan and has a license for assembling, progressive manufacturing and marketing of these vehicles in Pakistan. Indus Motors is the only company in the world to manufacture both these brands.

THE MARKET The ongoing global economic crisis, deteriorating law and order situation, and continued power shortages slowed Pakistan's real GDP growth to 2% for FY09 compared to 5.8% achieved in the prior year. Overall economic activity weakened despite growth in agriculture, while declining imports and slowing domestic demand resulted in lower tax revenue.

The large scale manufacturing sector recorded a dismal performance with a decline of -8.2% compared to 5.4% growth for the previous year. The first half of the financial year was particularly severe for the industry as inflation rose drastically while the rupee lost value against most major currencies (both dollar and yen are used in importing parts for assembling, therefore such devaluation increases the cost of goods by a large margin).

The industry also had to face challenges from government in the form of additional levies and taxes. The budget (2008-09) imposed a 5% Federal Excise Duty on cars with engine capacity of greater than 850cc. It also included imposition of fixed slabs of withholding tax. After the budget, the government also imposed a 35% cash margin on letters of credit (which was withdrawn several months later). Such policies led to a decline in production and subsequently, employee reduction. The government's decision to reduce depreciation allowance on import of used cars (from 2% to 1%), was one positive step for the automobile industry. In the new budget (2009-10), the government has eliminated the 5% FED which has translated into a stronger demand.

A tighter monetary policy led to limited availability of consumer finance. The higher interest rates did not attract consumers and demand for locally assembled vehicles dropped. Locally assembled Passenger Cars (PC) and Light Commercial Vehicles (LCV) sales dropped 47% YoY in FY09 from 187,412 units to 99,307 units. It had previously shown an annualized growth rate of 28% (2001-07). The main decline in sales was for vehicles up to 1000cc. This is the due to the fact that most affected by the slowdown of the national economy is the lower end of the market and society.

PERFORMANCE

While the sales of the whole automobile industry plunged, Indus Motors was able to increase its market share from 25% (FY08) to 32% (FY09).

VEHICLES

Sales for the CKD Passenger Car (Small-High Segment) reduced by 24% in FY09. While Indus Motors suffered a 20% decline in sale volume in this segment, it increased its market share to 69% (from 66%). Total sales of the Corolla vehicles were 26,760 units. The closest rival was Honda City with unit sales of 6,482 units.

Sales for the CKD Passenger Car (Economy Segment) reduced by around 60% in FY09. Daihatsu Coure (Indus Motors flag carrier in this segment) suffered a reduction of over 52% in sales volume though it increased its market share by 4% (from 26% to 30%).

CKD Light Commercial/Pickup Segment witnessed a plunge of 61% in sales volume. Though sales decreased by 23%, Indus Motors was able to double its market share to 45%. FY09 saw Indus Motors' sales and share in the CBU segment decline. The sales volume decreased by 59% whereas its share, though still dominant, reduced from 89% to 75%.

SPARE PARTS The spare parts segment of Indus Motors showed a healthy growth of 9% YoY, reaching Rs 1.5 billion. This segment has high possibilities which are restricted by the continued negative practices of under invoicing and smuggling. Though initiatives have been taken to reduce such acts, there is a lot to be done.

FINANCIAL PERFORMANCE

LIQUIDITY RATIOS The liquidity situation has improved consistently since FY03 when the current ratio hit a low of 1.19. Liquidity touched a high of 2.56 (FY08) before decreasing to 1.69 (FY09). From FY05 to FY06, current assets and current liabilities increased almost proportionally resulting in a small change in the current ratio (from 1.46 to 1.49). In FY07 both current assets and current liabilities decreased, though liabilities decreased by a greater amount, thus leading to an increase in the current ratio. In FY08, sales decreased due to lower demand. Large declines in both current assets and liabilities were seen, and again the decrease was far greater for current liabilities (-49% YoY).

This decrease was fueled by a drastic (-80% YoY) decrease in advances. Thus the current ratio spiked to its highest in recent history, ie 2.56. FY09 saw the current ratio fall drastically. The decrease came amid large increases in cash and bank balance (124% YoY) and stock-in-trade (55% YoY). It was mainly due to a disproportionate increase in current liabilities caused by an over 500% YoY increase in advances (from customers and dealers). This substantial increase is due to the fact that the advances in FY08 were abnormally low. This figure had decreased by over 80% YoY from around 4.5 million rupees to less than a million. The trend clearly shows that FY08 was an odd year for the company.

ASSET MANAGEMENT RATIOS

Inventory turnover has remained consistent since FY03 at around 42 days. It decreased in FY07 to 28 days due to a large decrease in stock-in-trade and stores & spares (over -25% YoY). The decline continued in FY08 (to 24 days) due to increased net sales and decreased stores & spares. Currently (FY09), the inventory turnover has slightly increased to previous levels of around 40 days on the back of large increase in stock-in-trade (55% YoY) and a lesser decrease in net sales (-8.6% YoY). The decrease in sales is not unique to Indus Motors alone.

It is currently an industry wide phenomenon which has seen sales decrease drastically. Sales of locally produced Passenger Cars (PCs) and Light Commercial Vehicles (LCVs) witnessed a YoY decrease of (-8%) in FY08 and of (-47%) in FY09. The large increase in stock-in-trade can be equated to the slowdown of the economy and the subsequent drying up of the consumer liquidity.

The sales-to-equity ratio has continued its downward trend. While sales have showed a mixed performance, increasing from FY02 to FY08 and then decreasing in FY09 (-8.59% YoY), total equity has continued to increase. It has achieved this increase without any new issues, due to increases in the company's reserves. Reserves have increased from around 850 million rupees (FY01) to around 9.5 billion rupees (FY09).

Total asset turnover had showed a consistent increase since FY02 to FY08. This showed that the sale generated by the productive capacity of the company was increasing year by year. The total asset turnover decreased in FY09 both due to a decrease in sales (-8.59% YoY) and a large increase in total assets (50% YoY). The increase in total assets came amid a slight decrease in fixed assets, mainly due to a 124% increase in cash & bank balance and a 55% increase in stock-in-trade. The ratio decreased from 3.01 (FY08) to 1.83 (FY09).

Day sales outstanding (DSO) has showed a varied performance. It increased in FY02 (20.5 days) and then decreased till FY05 (lowest of 5 days). It increased in FY06 (7.5 days) and then decreased again in FY07 (6 days). Since then it has continued to increase and is currently 16.5 days (FY09) largely because of an increase in trade debts. The recent increase can be attributed to the credit problems faced by the customers (mainly distributors due to a slowdown in demand).

DEBT MANAGEMENT RATIO

The debt to assets ratio has showed a varied performance. It increased from FY01 (49.28%) to FY03 (77.01%) and then continued to decrease till FY08 (31.36%). From FY07 to FY08 the ratio showed a decrease of 17.29%. This was due to a large decrease in debt (-43% YoY). It then increased in FY09 to 50.22%, mainly due to a large increase in debt (140% YoY). The long term debt to equity ratio decreased from FY01 (18.01%) to FY04 (1.11%) and then continued to increase to FY08 (5.64%). It then decreased to 4.89 in FY09. Whereas equity has continued to increase throughout, the main reason for the increase in this ratio since FY04 (to FY08) was due to the consistent increases in deferred taxation (1600% from FY04 to FY08).

The decrease of FY09 was also based on a slight decrease in deferred taxation (-5% YoY). The debt to equity ratio has remained consistent around 1, while the long term debt to equity has decreased to 4.89 (after touching a five year high of 5.64 in FY08) due to an increase in equity. Times interest earned ratio (TIE) has remained consistent till FY06. It increased to 97.37 (FY07) from 34.46, and then spiked in FY08. The spike took the TIE to 1284.23 (an increase of 1218% YoY). This was mainly due to a very low finance charges for that paricular year (FY08). The TIE returned to 78.09 in FY09.

PROFITABILITY RATIOS

The gross profit margin has remained consistent over the years. It increased from FY01 (6.83) to FY03 (13.73). Then it decreased for two years to 12.17 (FY05), then remained steady for two more years (FY05 - FY07). Since FY07 it has continued on a downward trend, touching 6.14 (FY09). The decrease in the margin has been due to the ever increasing cost of goods sold. The cost has increased hugely due to high rupee depreciation and the global oil crisis. Costs are also increased due the high inflation rate prevalent in FY09.

The net profit margin has also maintained a steady graph. Both net profit and sales increased from FY04 to FY07, the margin remained consistent. Since FY07, the margin has decreased due to decreasing operating profit and operating income. The net profit decreased from around 2.7 billion rupees to around 1.4 billion rupees. In FY09, the margin decreased due to heavy increase in administrative expenses (16% YoY). The return on common equity (ROE) decreased consistently from FY06. It was due to decreasing net profit amid increasing equity. Equity has continued to increase throughout due to continuous additions to the general reserve.

We can understand that the decrease in net profit was greater than the increase in equity. The ROE touched 13.49 (FY09) from 42.32 (FY06). The return on asset (ROA) had increased until FY08, after which it decreased in FY09 (6.70). The ROA's decrease can be attributed to an increase in total assets (50% YoY for FY09). Though this decrease can be translated as a failure on part of the assets to perform, we know that the decrease in returns is due to an industry wide slowdown of demand. The sales of Passenger Cars and Light Commercial Vehicles have decreased by over 47% in FY09.

MARKET VALUE

The company's book value has increased consistently over the years. Currently it stands at Rs 131 with a YoY increase of 9.1%. This increase is due to the high increase in reserves. Reserves have continued to increase while no new shares have been issued. This continuous increase has shown that the stockholders are well catered to and their share in the business has continued to increase. This also shows that the management is taking good care of the stockholders interests. Earnings per share (EPS) for the company had also showed continuous increase from FY01 (2.59) to FY07 (34.93). Onwards, the EPS has continued to decrease due to decreasing profits (). Profits have decreased on the back of decreasing demand in the market.

The decrease in demand can be attributed to many factors. These factors include increasing inflation, the subsequent drying up of liquidity, decreased available consumer finance, and some government regulations (namely increased sales tax and withholding tax). Dividend per share had increased from FY03 (7) to FY07 (13); and since has decreased to 10 (FY09). This too has been due to the decreasing profits for the company. The price to earnings ratio (P/E) has showed variance. It was 3.19 in FY02, from whence it decreased to 2.81 (FY03). Then onwards the P/E ratio increased to 8.68 in FY08, after which it decreased to 7.80 (FY09).

The market price of the company's share was 14.65 (simple average ) in FY02. The price then increased consistently till FY07 when it was 261.63 (simple average). It decreased to 253.03 in FY08, and then plunged down after the collapse of the stock market. At the end of FY09, the market price of the company's share was 107.72, while the average for FY09 became 137.37 (a YoY decrease of around -46%).

FUTURE ANALYSIS

The future of the automobile industry in Pakistan, at least the near future is not very bright. Consumer finance is dried up due to high interest rates and increasing NPLs. Continued inflation has also decreased savings and thus the buying power of the consumer. But as always, there is a distinct ray of hope. The economy is picking up the pace. The large middle class will in time want more cars and the demand will pick up. At the moment, the sector faces threats from many angles. Internationally, Pakistan's automobile market is being looked as more and more favorable; therefore many new companies are planning to expand here.

This increased competition poses a threat to the existing companies including Indus Motors. Also, the automobile sector is already under review with the Competition Commission of Pakistan (CCP) for alleged cartelization. Moreover a withholding tax of 5% was imposed on locally assembled cars (FY08). High prices of petroleum products (due to surcharges and levies) have also contributed to decreased demand of automobiles.

But a recent step to decrease depreciation allowance for import of used cars from 2% to 1% is seen widely as a positive step as it reduces the number of vehicles imported thus giving a boost to the local industry. The budget of 2009-10 also brings good news for the industry. The federal excise duty (FED) of 5% has been discarded. For Indus Motors, the future is brighter than that of the overall sector. Its sales are consistent, while that of others decreased. In 2008 it sold more than it produced. Even though new competition from Proton and other carmakers threaten the industry, Indus Motors looks safe with its market share.

CONCLUSION

As a corporation, Indus Motors is making greater profits. It continues to be a reliable investment and has seen its share price increase dramatically over the years, though that has decreased recently. Indus Motors continues to strive to become a good corporate citizen. It has regularly undertaken social initiatives regarding road safety, environment, technical education, etc. It takes care of all its stakeholders.

COURTESY: Economics and Finance Department, Institute of Business Administration, Karachi, prepared this analytical report for Business Recorder.

DISCLAIMER: No reliance should be placed on the [above information] by any one for making any financial, investment and business decision. The [above information] is general in nature and has not been prepared for any specific decision making process. [The newspaper] has not independently verified all of the [above information] and has relied on sources that have been deemed reliable in the past. Accordingly, the newspaper or any its staff or sources of information do not bear any liability or responsibility of any consequences for decisions or actions based on the [above information].

Toshi

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Re: INDU -- Indus Motor
« Reply #14 on: November 07, 2009, 11:12:33 PM »
INDU: Raising estimates post strong 1QFY10

???? We raise FY10-11E earnings estimates for Indus Motors by 12-18% and our DCF
based price objective by 10% to PRs240/sh.
???? Our upgrade follows stronger than expected 1QFY10 results - driven by margin and
other income accretion - and recent price hike of different models by 1.7-4.4%.
???? We believe continuing volatility in FX, regulatory risk and poor law-and-order
situation will remain the key concerns for financial performance in FY10E where
2HFY10E will be the litmus test for Indus’ resilience against these risks.
???? At PRs182.8/sh, Indus is trading at FY10E P/E of 5.5x, at 24% discount to our
implied multiple of 7.2x. We reiterate Buy with 31% upside from current levels.

Raising PO and FY10-11E estimates
We raise FY10-11E earnings estimates for Indus Motors by 12-18% and our DCF based PO by
10% to PRs240/sh. We also increase DPS forecasts for FY10-11E by 12-18%, by keeping payout
ratio constant at 60%. Our upgrade follows stronger than expected 1QFY10 results - driven by
margin and other income accretion - and recent price hike of different models by 1.7-4.4%. While
we remain cautious of Rupee devaluation against JPY (currently at PRs0.92 compared to PRs0.85
in June 2009), we believe greater pricing power and operating efficiencies will enable Indus to
weather the pressure. Nevertheless, any adverse FX movement (beyond our base-case of
PRs0.95 by June 2009) remains a downside risk to our estimates. We believe other income - from
own cash holdings that have ballooned to PRs6.2bn (PRs15.7bn including advances) - contributing
38% to bottom-line will further support 150bp YoY higher EBITDA margin (7.5%) in FY10E. Indus
is currently trading at an attractive FY10E P/E of 5.5x, a 24% discount to our implied multiple and
market P/E of 7.2x. We reiterate Buy with 31% upside from current market price of PRs182.8/sh.

1QFY10 earnings driven by other income and margin accretion
Indus announced stronger than expected 1QFY10 earnings of PRs9.66/sh. While CBU demand
dropped by 75% and depressed unit sales by 9% QoQ, the performance was driven by (1)
sustained EBITDA margin of 9% and (2) strong other income of PRs423mn (36% of bottom-line).

Volatile FX – key risk in FY10E
We believe continuing volatility in FX, regulatory risk (localization targets and pressure to reduce
prices) and poor law-and-order situation will remain key concerns for Indus’ financial performance
in FY10E. Although Indus has started Yen/US$ hedging, adverse FX volatility can affect
performance nonetheless. Rising farm income due to rich harvest has complemented success of
Indus’ new Corolla model so far. However, aggravating law-and order situation remains a key
downside risk to volumetric sales in our view. Our base-case assumes volumetric sales of 42,878
units in FY10E, up 20% YoY. We believe 2HFY10E earnings will be the litmus test for Indus’
resilience against all these risks considering that volumetric sales are generally seasonally lower
during the period.

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Re: INDU -- Indus Motor
« Reply #15 on: November 13, 2009, 01:04:59 PM »
INDUS MOTOR COMPANY LIMITED: FUELLED UP!
   
Strong potential for growth
 We expect Indus Motors (INDU) to record a YoY sales growth of 23% to 43,389 units (42,000 locally assembled and 1,389 imported) in FY10 and will continue to grow at a 3yr CAGR of 5.3% through FY13. We also believe its gross margin to increase to 9.71% in FY10 from 6.14% in FY09 and remain steady going forward. Our forecast is based on the assumptions that (1) input prices will see a gradual rather than a sharp move upwards, (2) PKR will remain weak against USD and JPY but will not be as volatile as it was in FY09, and (3) any increase in costs will continue to be passed on to consumers in the shape of higher prices. Coupled with higher other operating income the positive impact is also expected to be carried down to the bottom line. 

Cash: Adds color to the Balance Sheet
 The latest financial results (1QFY10) show INDU’s cash balance at PKR15.7bn, 8.1x the cash balance held in 1QFY09 at PKR1.9bn. This translates into an impressive cash of PKR200//share which exceeds its stock price by 6%. Further, cash per share excluding advances from customers and dealers comes out to be PKR79. This shows that cash makes up 42% of the company’s share price which signals its ability to pay debt, pay dividends, buy back stock and facilitate the growth of business. Also, a healthy cash flow per share points to potentially higher EPS and future share prices. 
Valuations: Compelling 52% Upside!

 INDU is a strong BUY based on our DCF based fair value of PKR287.6 which offers an upside of 52% at current price levels. On a PER basis, the scrip has historically re-rated on the back of expansions and improved industry fundamentals. On FY10F earnings, the stock trades at a PER of 4.9x. It is also a highly attractive company based on its FY10F and FY11F EV/EBITDA multiples of -3.70 and -3.38 respectively. 
 

Toshi

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Re: INDU -- Indus Motor
« Reply #16 on: November 21, 2009, 09:58:57 PM »
Indus Motor Company Limited (INDU) 1QFY2010 – Result Review

The profitability of the company increased by 20 folds to PKR 1,167 million (EPS:
PKR 9.66) during 1QFY2010 as compared to PKR 57 million (EPS: PKR 0.66)
reported in the same quarter last year. The main reasons behind this
extraordinary surge were i) sales volume depicting substantial augmentation of
108% to 10,426 units, ii) Japanese Yen only depreciating against Pakistan Rupee
by 10% in contrast to 16% observed in same quarter last year. iii) escalation in
car prices which aided the company to enlarge its gross profit margins to 8.49%
in 1QFY2010 in contrast to 3.41% declared in same period last year. Last but not
least, other income supplemented in raising company’s bottom line by 36% due
to huge increase in advances from customers by 6 times to PKR 6 billion for the
period from less than a billion recorded in 1QFY2009.

Revision in earning estimates and Target price

As a result of phenomenal performance in 1QFY2010, surging trend in car prices
and recovery in the volumes, we have revised our earnings estimates and target
price for the scrip. We have revised our DCF based target price for December
2009 to PKR 191 per share from PKR 152. The company is currently trading at a
prospective of PE of 8.27 and .32 for FY10E and FY11F respectively.

Recommendation

INDU is currently trading at a 5% premium if compared to our DCF based
price for December 2009 of PKR 191. Therefore we recommend Hold.

Toshi

  • Guest
Re: INDU -- Indus Motor
« Reply #17 on: November 23, 2009, 12:03:36 PM »
INDU changes prices yet again
Indus continuing with its trend of reacting to changing
demand, slashed prices by Rs4,000 to Rs27,000 across its
product portfolio on Saturday, according to a news report.
This was after it had jacked up rates only as recent as mid of
the last month to accommodate for Yen’s appreciation against
the rupee. The management had then been of the opinion,
that the consumers would have remained undeterred by this
price change. Notably, Toyota XLI’s price has been pushed
down to Rs1,242,000 from Rs1,269,000 (? -27,000) and
GLI’s price been cut by Rs9,000 to Rs1,375,000. This as we
understand, has been done to boost weak demand
particularly for XLI which persisted following the previous
price hike. The company however has not officially validated
this price revision.

Toshi

  • Guest
Re: INDU -- Indus Motor
« Reply #18 on: November 23, 2009, 09:06:12 PM »
R3 = 204.96
midr3 = 204.22
R2 = 203.48
midr2 = 202.245
R1 = 201.01
midr1 = 200.27
*************
p = 199.53
*************
mids1 = 198.295
S1 = 197.06
mids2 = 196.32
S2 = 195.58
mids3 = 194.345
S3 = 193.11