Indus Motor Company Ltd. (PSX: INDU) has released its financial results for the first quarter of fiscal year 2024 (1QFY24). The company reported an impressive profit of Rs. 3.2 billion, marking a substantial 148% year-on-year (YoY) increase. However, this figure declined by 16% when compared to the previous quarter (QoQ). Alongside the positive earnings news, INDU also announced an interim cash dividend of Rs. 24.5 per share, much to the delight of its shareholders. This financial performance exceeded industry expectations, with the main factor being higher-than-estimated revenue.
Despite the strong profits, there were challenges in the 1QFY24 results. INDU’s total revenue for the quarter was Rs. 32.7 billion, which represented a 12% YoY decrease and a more significant 23% QoQ decline. This drop was primarily due to an 18% QoQ decrease in car sales volumes.
The gross margin decreased to 10.1%, down 8 percentage points. This was mainly attributed to the absence of inventory gains and year-end adjustments seen in the previous quarter. However, it’s worth noting that the margins remained above the 3-year quarterly average of 9.4%.
Other income also saw fluctuations, decreasing by 45% YoY to Rs. 2.8 billion, but it increased by 12% QoQ due to a 20% rise in the company’s cash and cash equivalents.
The effective tax rate stood at 35%. Indus Motor Company’s earnings per share (EPS) for 1QFY24 was Rs. 40.9, a significant improvement from Rs. 16.5 per share in the same period last year.
At the time of reporting, INDU’s stock was trading at Rs. 955, showing a 0.53% increase and a turnover of 616 shares. This demonstrates a positive investor sentiment in response to the company’s strong financial results despite some challenges in the auto industry.