Indus Motor plans to introduce locally assembled Toyota hybrid cars in 4-6 months

KARACHI: Indus Motor Company, the producer of Toyoto cars, announced that its Hybrid facility is under construction and it plans to launch the HEV car in the next four to six months.

The company said at a briefing that it will focus on electric vehicles after launching hybrid vehicles that are assembled locally. Electric vehicles are not a priority at the moment because of the lack of charging stations in Pakistan and the high dependence on non-renewable energy sources.

• Indus Motors Company Limited (INDU) reported its financial results for FY23 on 28th Aug’23, showing a Profit After Tax (PAT) of PKR 9,664mn (EPS: PKR 122.96), which was 39% lower than the previous year. However, in 4QFY23, the earnings increased by 7.5 times YoY to PKR 3,820mn (EPS: PKR 48.61). The company’s profitability in the last quarter improved because of several factors, such as a better sales mix, higher prices, lower input costs, and more investment income.

• The sales volume of Indus motors decreased by 58% YoY, because of lower production due to the shortage of parts caused by import restrictions.

• The gross margin for FY23 was 4.5%, which was 220 bps lower than FY22 (6.7%). This drop in gross margins was a result of PKR devaluation. However, on a quarterly basis, INDU managed to restore its gross margins, reaching 18.1% in 4QFY23, compared to 1.2% in 3QFY23. Higher margins in 4Q were due to one-time inventory gains and are likely to change in the future.

• During FY23, the company’s fall in profitability was compensated by higher other income, which was PKR 14.2bn (+51% YoY). The increase in other income was because of higher returns on short-term investments as interest rates stayed high.

• The auto sector will continue to face challenges from the SBP import restrictions and the unstable exchange rate.

• During FY23, the company had to shut down its plant frequently i.e. ~45 days.

• Total Assets of the company were PKR 122bn (down by 43% YoY) in FY23, mainly due to the reduction in consumer advances which were PKR 9.7 bn, down by 91.3% YoY.

• The share of locally-sourced parts in Corolla and Yaris is 60%, while the share of locally-sourced parts in IMVs is 42%.

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