AKD Quotidian about — Auto Sector: Sep13 Sales Volumes

Karachi, October 14, 2013 (PPI-OT): As per the latest data released by the Pakistan Automotive Manufacturers Association (PAMA), auto industry volumes (Cars and LCVs) for the month of Sep’13 increased by 0.6%MoM/14.9%YoY to stand at 11.2k units.

According to AKD Securities tractor sales in Sep’13 continued with their disappointing trend declining by 9.4%MoM/32.2%YoY. Coming back to auto sales, AKD Securities attributes the the annual improvement numbers to i) increased sales of HCAR following release of its new Civic towards the end of FY13 and ii) continued increase in auto financing where the outstanding stock of auto credit has risen by 16.4%YoY/1.5%MoM in Aug’13 to PkR52.2bn. At current levels, AKD Securities remains ‘Overweight’ on the Auto sector.

PSMC: Sold 6,287 units in Sep’13, up 5.1%MoM and 4.1%YoY. The higher sales were primarily driven by increased sales of Mehran (+16.1%) and Cultus (+8.8%) while Ravi sales disappointed (-ve 16.3%). At current levels, PSMC is trading at CY13F and CY14F P/E of 5.2x and 5.8x, respectively. AKD Securities retains ‘Buy’ stance with a TP of PkR178/share.

INDU: Sep13 sales disappointed at 2,602 units, depicting a decline of 11.0%MoM but were up by 22.7%YoY. On a cumulative basis, 1QFY14 sales declined by 29.5%QoQ owing to i) launch of the new Civic by HCAR as well as anticipation regarding the new Corolla to be launched in 2HFY14 and ii) decline in Fortuner sales by 79.3%QoQ owing to increased indirect taxes on luxury vehicles in the FY14 Budget.

HCAR: Continued with its strong performance with volumes growing by 4.1%MoM to 2,215 units. The increase in sales is largely attributed to increased Civic sales (+6.9%MoM) while sales of City were also up an encouraging 1.9%MoM.

Tractors: Sales of 1,755 units in Sep’13 are down by 9.4%MoM and 32%YoY. Drilling down, while AGTL’s sales volumes were up by 20%MoM/6%YoY with 620 units, volumes for MTL declined by 20%MoM and 43%YoY to 1,135 units.

INDU: 1QFY14 Result Preview
The Board of INDU is scheduled to meet on Oct 21’13 to announce the company’s 1QFY14 results. AKD Securities expects the company to post NPAT of PkR681mn (EPS: PkR8.66) in 1QFY14 against NPAT of PkR1,627mn (EPS: PkR20.71) recorded in the previous quarter, a decline of 58%QoQ (-ve 1.4%YoY). Topline is expected to decline by 32%QoQ to stand at PkR14.4bn on the back of lower sales with volumes declining by 29.5%QoQ to stand at 8,419 units. Sales of INDU’s high margin variant Fortuner took a severe hit in 1QFY14, where AKD Securities estimates gross margins to decline by 464bps to stand at 8.5% as a consequence. ‘Other Income’ is expected to clock in at PkR244mn, down 21%QoQ owing to lower cash balance due to declining quarterly sales. At current levels, while AKD Securities has a ‘Buy’ stance on INDU with a target price of PkR400/share, AKD Securities expects price performance to remain jittery particularly in lieu of PkR depreciation witnessed in the current quarter.

The post AKD Quotidian about — Auto Sector: Sep13 Sales Volumes appeared first on AsiaNet-Pakistan.

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