30% record growth in Auto Sector in Jan-May

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Growth in auto sector

Pakistan Economy news shows that the three auto companies of the country have shown phenomenal growth of 30% against just a 4% gain in the Karachi Stock Exchange (KSE) 100-Index during the first five months (Jan-May) of calendar year 2015.

The highest jump was seen in Indus Motor Company, the makers of Toyota Corolla, which posted astounding gains of 41% calendar year to-date (CYTD).

The other two companies, Honda Atlas Cars and Pak Suzuki Motor rallied 21% and 19%, respectively, in the period under review. The fundamental reason for price run can be attributed to volumetric growth and expansion in gross margins, according to Global Research.

During the first quarter (Jan-Mar) of calendar year 2015, Indus registered earning growth of 239% year-on-year (YoY) to Rs3.28 billion. Pak Suzuki’s profitability surged by 114% YoY to Rs946 million.

“Moreover, we estimate Honda Atlas Cars earnings to follow the same suit, and is expected to report earnings growth of 70% YoY to Rs1.07 billion,” the report added.

For fiscal year (Jul-Jun) 2014-15, the report estimated domestic car sales (including PV & LCV) to grow by 31% YoY to 179,231 units primarily due to the success of the new Corolla and deliveries of LCVs under Punjab’s Apna Rozgar Scheme from second half of fiscal year 2015.

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