INDU Forecasts Sales Up to 30,000 Units in FY24

By Newztodays Team

INDU Forecasts Sales of 28,000 to 30,000 Units in FY24, which may be slightly lower than in FY23.

Indus Motor Company Limited conducted its FY23 corporate briefing session, where management discussed financial performance and future outlook.

INDU expects to sell 28,000 to 30,000 units in FY24, compared to 31,602 units in FY23.

The Indus Motor expects to launch a hybrid vehicle that is on schedule and expected to be launched early next year.

The management did not comment on the price range, stating that it’s too early to provide a range given the current economic situation, with the US dollar fluctuating every day.

In 4QFY23, INDU recorded a one-off gain due to exchange rate fluctuations, resulting in higher-than-expected gross margins.

Management informed that the localization rate in value terms for Yaris and Corolla is 60% after the deduction of taxes and duties.Local Auto Vendors Hopeful of Sustainable Recovery

INDU’s current capacity is 76,000 to 80,000 units on a double shift. With overtime, capacity can increase to 90,000 units.

Pakistan’s total car sales (including non-PAMA and used imports) declined by 57% YoY to 163k units in FY23. The drop in volumetric sales was due to import restrictions and demand contraction.

Pakistan imported 6,583 used cars in FY23 compared to 28,123 units in FY22.

INDU market share stood at 19.3% in FY23 vs 19.9% in FY22, PSMC at 40.0% in FY23 compared to 39.6% in FY22, and HCAR at 10.3% in FY23 compared to 10.4% in FY22.

Going forward, management expects the auto sector will continue to remain a victim of the ailing economy. The persistent devaluation of PKR against the US dollar, high inflation, higher interest rates, along with higher taxes, will continue to deteriorate the purchasing power of consumers.

Net sales in FY23 declined by 36% YoY to Rs178bn from Rs276bn in FY22 mainly due to the reduction in volumetric sales. Similarly, profit after tax also decreased by 39% YoY to Rs9.7bn in FY23 compared to Rs15.8bn in FY22.

INDU recorded gross margins of 4.5% in FY23 compared to 6.7% in FY22 due to an increase in input costs mainly driven by significant rupee devaluation and high inflationary impact.