Pak Suzuki posts 73% growth, sales up by 17% in 9MCY11

[53fd]

KARACHI: Pak Suzuki (PSMC) recorded a significant growth in its bottom line during nine months of calendar year 2011 (9MCY11). According to present analysis of 9MCY11 financials, PSMC posted 73 percent year-to-year (YoY) growth in profit after tax (PAT) in said period 9MCY11.

The bottom line of PSMC grew by a massive 73 percent YoY to Rs 672 million (EPS Rs 8.16) during 9MC Y11. This is mainly due to 17 percent YoY increase in volumetric sales coupled with increase in sales price by an average 7.5 percent during the said period.

Moreover, a modest growth of 5 percent YoY in other income also helped in boosting the company’s bottom line.

Despite the increase in vehicle prices, margins of the company remained largely intact, as gross margins grew by a minimal 0.7 percent YoY to 3.8 percent and operating margin grew by 0.8 percent YoY to 1.9 percent. Moreover, net margins of the company inched up by only 0.5 percent YoY to 1.7 percent during the 9MCY11.

With the depressed Pak rupee against the major currencies, production cost of the company was the major concern. In this regard, JPY appreciated by 13 percent YoY, while international steel prices were up by 20 percent YoY during 9MCY11. Both of the factors remained a big challenge as around 60 percent of the parts come from Japan, while steel is the major raw material of the company.

During 9MFY11, the company’s sales volumes improved by a massive 17 percent YoY to 68 thousands (k) units. During the said period, PSMC’s Mehran car sales augmented by a huge 24 percent YoY to 20.9k units. PSMC’s another variant, Swift also posted a hefty growth as its sales were up by a gigantic 47 percent YoY to 4.4k units.

Moreover, Alto, Bolan and Ravi also posted a substantial growth of 14 percent YoY to 9.8k units, 20 percent to 10.9k units and 18 percent YoY to 11.96k units respectively during 9MCY11. However, Liana and Cultus posted a decline of 22 percent YoY to 438 units and 2 percent YoY to 9.5k units respectively during January-September 11 period.

Due to weakness of the Pak rupee against major currencies and rise in the international steel prices, PSMC’s gross margins would remain stagnant during CY11, while the government of Punjab’s Yellow Cab Scheme would help the company improve its Mehran and Bolan sales during remaining part of the CY11.

At current level, analysts recommend ‘Hold On’ PSMC with the target price of Rs 77 per share. Currently, PSMC is trading at a PE of 7.9x with a dividend yield of 3.5 percent for 2012.

Daily Times - Leading News Resource of Pakistan

 

[salvage]

I think they should re-introduce Suzuki Fx.

 

[true_indian]

Now that Pakistani auto industry is doing well, can we have little competition by opening this sector for Indian exports? I mean both 2 and 4 wheelers.

 

[SBD-3]

Rewards of market power....The cartelization in Auto industry has not helped the either the consumer or the national objective, but the auto owners themselves. Not only these automakers have controlled the prices, hurting the consumers but also failed to indigenize the technology along with lack of innovation at domestic production. Interestingly, when government took the right step to increase competition, these automakers started making a hue awe saying they had installed additional capacity which will go waste. Some of our posters advocate the protection of domestic industry, but forget that these producer make us suffer with higher prices and lack of choice. Pak-Suzuki is no different. The mehran is the same as it was in 90s, these guys are pathetic at local designs.

---------- Post added at 12:20 PM ---------- Previous post was at 12:20 PM ----------

Now that Pakistani auto industry is doing well, can we have little competition by opening this sector for Indian exports? I mean both 2 and 4 wheelers.

I think government as per new policy has allowed manufacturers from China to set up local manufacturing....

 

[bc040400065]

more competition is needed.its really surprizing that the prices have gone really high in just few years. and lack of local production is a major reasons for it. i think Industries ministry should lay down some terms, ask them to localize production to atleast 75%, or they should allow free import. localize it, as it will increase employement oppotunities, decrease the cost of production and Imports.

 

[Xracer]

Now that Pakistani auto industry is doing well, can we have little competition by opening this sector for Indian exports? I mean both 2 and 4 wheelers.

yes Please Brothers

 

[Pioneerfirst]

What advantage they are giving to Pakistan,or Pakistanis.despite giving few hundred jobs

Prices are one of the highest in the world
even 800 CC cars have attained only 68% local manufacturing.
You have to give 100% advance and wait for atleast 6 months for car.does it happens anywhere else.
Low tech cars,800 CC and 1000CC models use carburator based engines which were replaced in india way back.

 

[Patriot]

Pakistani Car Mafia is looting the people.

 

[my name is arya]

Pakistani Car Mafia is looting the people.

pakistani ca mafia, pakistani force, pakistani leaders, every one is looting the common pepoples

 

[Major Sam]

pakistani ca mafia, pakistani force, pakistani leaders, every one is looting the common pepoples

so as ur habit start , u start trolling

 

[GURU DUTT]

Hey guys after this thread i was talking to a pakistani guest you know what he told me he said there is no concept of vehicle insurence in Pakistan is that true??????

 

[Devil Soul]

Hey guys after this thread i was talking to a pakistani guest you know what he told me he said there is no concept of vehicle insurence in Pakistan is that true??????

I kinda agree with him, Bank & Insurance companies do provide this service, but very less people seems to get it done

 

[GURU DUTT]

I kinda agree with him, Bank & Insurance companies do provide this service, but very less people seems to get it done

so what happens if your vehicels gets into a accident ?????????

 

[Devil Soul]

so what happens if your vehicels gets into a accident ?????????

well really hard to answer, i'll say PASS

 

[mjnaushad]

so what happens if your vehicels gets into a accident ?????????

If you know a company will be paying you for repairing your car you'll surely charge more...... To an ordinary costumer the case will be different.... Repairing car is not as expensive as it is in foriegn countries....

---------- Post added at 05:37 PM ---------- Previous post was at 05:36 PM ----------

I think they should re-introduce Suzuki Fx.

I totally agree..... From 1987 to date no change in mehran..... Just introduce FX again so people can enjoy that car again in a brand new style...