Over the last few years, Pakistan’s auto industry is making strides as many foreign investors, such as Renault and Nissan, are planning to penetrate the industry. Realizing the growing competition, Pak-Suzuki Motor Company (PSMC) has been aggressively making efforts to retain its position in the auto industry by introducing new models at competitive prices. According to a bourse filling, the auto manufacturer’s profit has increased 38% to PKR 1.30 billion during the first quarter of the current fiscal year.
The surge in profit of the company is attributed to the increasing demand stemming from the arrival of Careem and Uber (on-demand ride services). It is worth noting that the auto manufacturer reported a profit of PKR 947.64 million during the similar timeframe of the previous year. This very fact indicates that Pak-Suzuki has come a long way by tapping on the opportunities and creating traction among the customers to buy its vehicles.
Earnings per share (EPS) of the company also increased to PKR 15.88 from PKR 11.51 in the corresponding period. According to industry experts, the outcome is higher than their expectations. The share price of the company also hit the upper limit of 5%, increasing PKR 37.83 to PKR 794.59, with a total volume of 2,800 shares.
According to the profit and loss account of the company, its sales increased by 19% to PKR 23.89 billion from PKR 19.99 billion.
“While vehicle sales usually take-off in the first quarter of the calendar year, we believe demand also remained upbeat given the advent of popular taxi services (Uber and Careem),” Arif Habib Limited said.
Reports indicate that Punjab Chief Minister is also planning to launch an Orange Cab Scheme in an attempt to cater almost 100,000 unemployed youth of the country. Moreover, under the 2015 Apna Rozgar Scheme, the government of Punjab distributed 50,000 units of Bolan/ Ravi vehicles, which added almost PKR 22 to PKR 25 per share to Pak-Suzuki’s bottom line, according to Arif Habib Limited.
“PSMC has yet to acknowledge any official correspondence regarding the same. We view additional order book impact (100,000 units of Bolan / Ravi) could be Rs50.00/share. Albeit, announcement and distribution may commence post budget and result in the company working at near max capacity,” it said.