Karachi, August 25, 2023 (PPI-OT): INDU 4QFY23 and PSMC 2QCY23 Result Previews

INDU-4QFY23 EPS of PkR36.1 expected: INDU’s board is scheduled to announce its 4QFY23 results today, where we expect company to post some earnings of PkR2.8bn (EPS basic: PkR36.1) vs. PAT of PkR3.2bn (EPS: PkR40.9) in 3QFY23, a decline of 12%QoQ. This decline is attributed to lower sales volume during the quarter, with 5.5k units sold, down from 7.3k in the prior quarter and 18.0k units in SPLY, resulting in an 11%/41% QoQ/YoY drop. Meanwhile, other income is expected to rise by 11% QoQ to PkR3.4bn (PkR43/sh), driven by higher interest rates, however a 35% annual decline due to a decrease in short-term investments. Furthermore, effective tax is anticipated to clock in at PkR2.0bn, resulting in an ETR of 42% vs. 34% in the previous quarter amidst retrospective implementation of super tax. The overall FY23 earnings are projected at PkR110.5/sh, reflecting a decline of 45%YoY. Lastly, a cash dividend of PkR20/sh for the final quarter is expected, bringing the full year dividend to PkR62.8/sh.

PSMC-Loss of PkR10.8 expected for 2QCY23: Pak Suzuki Motor Company Limited. (PSMC) would announce its 2QCY23 results today, wherein we are expecting the company to post LAT of PkR891mn (LPS: PkR10.8) for the quarter, vs LPS of PkR156.9/sh in previous quarter and EPS of PkR5.4/sh in SPLY. The reduction in loss is attributed to the absence of a significant financial cost that the company incurred, encompassing exchange loss of PkR3.5bn on foreign liabilities. The topline is projected to reach PkR18.7bn (a 14%/71% QoQ/YoY drop) mainly due to reduced sale volumes of 7.4k units, down 22%QoQ and 82%YoY, largely offsetting an increase in prices.

Gross margins are expected to improve to 10.1% during the quarter compared to 9.1% in the previous quarter, attributed to the full impact of increased sale prices, with the US$/PkR parity being relatively stable during the quarter. Additionally, finance cost is anticipated to increase by 59% YoY to PkR1.3bn, driven by heightened short-term loans and interest rates. Finally, for the 1HCY23, the company's loss accumulates to PkR13.8bn, resulting in an LPS of PkR167.8.