TPL Trakker (Private) Limited (PSX: TPLT) was incorporated in Pakistan in December 2016. The company is a subsidiary of TPL Corporation Limited while TPL Holdings (Private) Limited is the parent company of TPLT. The company is engaged in the installation and sales of vehicle tracking devices along with fleet management services. The company also provides IoT solutions to a wide range of industries. Some of the services offered by TPLT includes cold chain monitoring, fuel monitoring, Genset monitoring, Driver Behavior monitoring etc.
Pattern of Shareholding
As of June 30, 2022, TPLT has a total of 187.263 million shares outstanding which are held by 1203 shareholders. Associated companies hold around 65 percent shares of the company to become the largest shareholder of TPLT. This is followed by Modarba and Mutual funds holding around 16 percent shares of TPLT. Local general public have a stake of around 5 percent followed by foreign public owning around 2 percent shares. Insurance companies hold 1.3 percent shares of TPLT. The remaining shares are held by other categories of shareholders.
Historical Performance (2018-2022)
The topline of TPLT has grown in all the years under consideration except for a dip in 2020. That was the year when the company not only witnessed a drop in revenue but also posted a negative bottomline. In 2021, TPLT posted the highest revenue growth among all the years under consideration, yet bottomline stayed in the negative zone, however, the magnitude of losses somewhat lowered. 2022 appears to be the most fortunate year for TPLT as it posted the highest ever revenue of Rs.2106 million and the fattest bottomline of Rs.197 million. The margins of the company which had been shrinking until 2020 started showing signs of recovery in 2021 and the pattern followed in the subsequent year.
Delving into the financial details reveals that in 2020 the company’s revenue plunged by 9 percent year-on-year on account of a massive decline in the sales of automobile sector. Not only did the equipment installation and sales dipped, monitoring fee and rental from tracking devices also remained lackluster during the year. Some of the decline was offset was navigation fee and E-ticketing fee as during the year, TPL Maps (Private) Limited and TPL Rupiya (Private) Limited were merged into TPLT. GP margin dropped to 24 percent in 2020 as against 57 percent in the previous year. Lower business activity resulted in a curtailed distribution cost during the year. Administrative expenses also posted a marginal 1 percent growth, yet TPLT posted operating loss worth Rs.92 million during the year as against the operating profit of Rs.350 million in the previous year. Then finance cost magnified by around 66 percent year-on-year on the back of increased borrowings coupled with high discount rate in the first three quarters of 2020. As of 2020, TPLT’s debt-to-equity ratio stood at 68 percent as against 56 percent in the previous year. While other income performed exceptionally well in 2020 and grew by over 160 percent year-on-year mainly on the back of income from related parties and non-financial assets, yet TPLT posted a massive net loss of Rs.459 million in 2020 as against the net profit of Rs.36 million in the previous year.
In 2021, the GP margin of TPLT jumped to 34 percent as the business segments performed above expectations. Navigation revenue went an extra mile to buttress the topline by growing by over 3 times in 2021. The topline grew by 18 percent year-on-year in 2021. The company kept a strict check on its operating expenses which resulted into an OP margin of 10 percent in 2021 as against the operating loss margin of 6 percent in the previous year. Research and development expense grew by over 2 times in 2021. Low discount rate during the year enabled the company to curtail its finance cost by 24 percent year-on-year. Debt-to-equity ratio also dipped from 68 percent in 2020 to 58 percent in 2021, yet finance cost proved to be humungous enough to turn operating profit into a net loss of Rs.120 million in 2021.
In 2022, TPTL recorded a 12 percent year-on-year growth in sales. GP margin grew to 35 percent owing to better sales mix, improved charges as well as cost control measures. Operating expenses grew in line with inflationary trend; however OP margin clocked in at 13 percent in 2022 with a 48 percent year-on-year growth in operating profit. The company was also able to put brakes on its finance cost amidst high discount rate, by curtailing its debt-to-equity ratio to 49 percent in 2022. The NP margin stood at 9 percent in 2022, the highest in all the years under consideration.
Recent Performance (1HFY23)
TPTL continued to attain new highs in 1HFY23 despite rising inflationary pressure, political instability, diminishing purchasing power of consumers and unprecedented economic headwinds. The year-on-year growth of 16 percent in turnover coupled with operational efficiencies and automation resulted in the GP margin of 36 percent in 1HFY23 as against 34 percent during the same period last year. While the import restriction and currency depreciation has brought the automobile sector to a standstill, TPLT has broadened its base in the corporate fleet. Moreover, with a staggering increase in the prices of fuel, the demand of TPLT’s Genset and fuel monitoring solutions is also gaining momentum.
OP margin of the company clocked in at 15 percent in 1HFY23 as against 8 percent in the same period last year as the company kept a check on its operational expenses. Finance cost, yet again, bounced back, posting a 73 percent year-on-year growth owing to high discount rate, yet other income, to a great extent absorbed the negative effect of high finance cost. The bottomline posted a Net profit of Rs.26 million in 1HFY23 as against the loss of 78 million in 1HFY22. NP margin clocked in at 2 percent during the period under consideration.
Future Outlook
With the core revenue driver of TPLT i.e. auto sector being under pressure, the company is diversifying its business portfolio to continue growing amidst economic and political headwinds. Digital location and mapping and Industrial IoT will continue to provide growth impetus to the company on the face of grappling auto tracking revenue. Besides, the company is also expanding its international revenue mix. The company also plans to launch its consumer app in the ongoing year which will focus on the pain points in Pakistan such as fuel consumption, optimized cost routing, improved navigation tools etc. With an augmented level of diversification, TPLT is expected to boast sustained performance and rebounding margins in the coming times.