Indus Motor Company (IMC) is expected to raise auto rates amid a recent hike in freight charges and ongoing local currency devaluation, according to brokerage house Topline Securities' latest report, released Friday.
As per the report, IMC is likely to increase car prices by 12%-15% and the decision to hike prices "will be taken no later than June 2022."
It is worth noting the Pakistani Rupee has devalued by over 12.5% against the US Dollar during the current fiscal year, and by 15.4% since its most-recent high, achieved on 14 May 2021.
The brokerage house also said IMC sales volume is expected to improve in FY22.
“We now expect IMC volumes to arrive at 71,000 in FY22 compared to our earlier projection of 61,000 units,” said the report.
It was of the view that the revision in volumetric sales is on the back of (1) 8MFY22 sales, where IMC sold 49.5k units, up by 38% YoY and (2) considering the current order book, which is full till the end of the FY22, as per the management.
The IMC is currently operating at a double shift capacity and will continue doing so due to the strong demand for vehicles, which evident from long waiting times.
“The waiting time for Corolla is four to five months while for Yaris it is around two months,” said the report.
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IMC manufactures Toyota brand vehicles in Pakistan, including Corolla, Yaris, Hilux and Fortuner.
As per IMC's latest financial statements, the company’s net sales turnover for the half-year ended on December 31, 2021 increased to Rs 135.18 billion, as compared to Rs 79.65 billion for the corresponding period last year. Profit after tax has increased to Rs 10.18 billion as against Rs 4.80 billion in the same period last year.
Net profit for the six months has increased mainly due to higher CKD and CBU volumes, and an increase in other income on account of an increase in customer advances.
IMC's market share in the overall market stood at approximately 20.4% for the half-year ended December 31, 2021.
Earlier in January, Pak Suzuki Motor Company (PSMC) increased prices across its passenger car line-up.