LAHORE: Panther Tyres released their earnings for Q3FY23 to the Pakistan Stock Exchange (PSX) on April 12. The company came out swinging by recording a final earnings of Rs 236.6 million, a whopping 79.45% quarter-on-quarter (QoQ) increase on its Rs 131.8 million in Q2FY23. The Rs 236.6 million is also an unprecedented 2228.57% year-on-year (YoY) increase on the Rs 10.16 million it recorded in Q3FY22. Panther’s 9MFY23 earnings, however, stand at Rs 101.2 million. This is a 62.46% YoY decrease from its 9MFY22 profit of Rs 269.6 million.
The disparity in Panther’s Q3FY23 and 9MFY23 earnings is attributable to the loss it incurred in Q1FY23.
What’s Panther Tyres?
Established in 1983, Panther Tyres Limited is a prominent manufacturer and supplier of tyres, tubes, lubricants, and spare parts within Pakistan. It holds a leading position in the motorcycle tyre market for both OEM and replacement segments within Pakistan and exports its products to various regions including Asia, the Middle East, Africa, and Europe.
The company operates a sophisticated factory on a 30-acre site dedicated to the production of tyre and tube products along the Lahore-Sheikhupura Road, in Sheikhupura. The company’s customer base includes prominent firms such as Pak Suzuki, Yamaha, Atlas Honda, United Motorcycles, Millat Tractors, Asia Hero, Road Prince, Super Power, Super Star, Sazgar, Qingqi, and Unique.
The company recorded a total revenue of Rs 4.88 billion for the quarter ending March 31, with a final gross profit of Rs 813.8 million. The company’s gross profit stood at a QoQ increase of 34.75% from the Rs 603.9 million seen in Q2FY23 whilst on a YoY basis, it grew by 87.12% from the previous year’s Rs 447.8 million. The company’s Q2FY23 gross profit margin (GPM) stood at 16.67%, higher than both its Q2FY23 GPM of 12.54%, and Q3FY22 GPM of 10.12%.
The company’s operating profit clocked in at Rs 529.8 million. This amounted to a 73.97% QoQ increase from the previous quarters Rs 304.5 million, and a 133.2% YoY increase from the previous years’ Rs 227.18 million. Panther’s cost of finance also rose to Rs 257.9 million. This was a QoQ increase of 16.84%, and a YoY increase of 47.35% from the previous interest expenses of Rs 220.7 million and Rs 175 million respectively.
The company’s tax expense rose on a QoQ but fell YoY. It rose by Rs 83 million from the Rs 48 million rebate it received in Q2FY23. On a YoY basis, it fell 15.94% from Rs 41.97 million in Q3FY22 to Rs 35 million in Q2FY23.
What’s the reason for the rally
Saad Khan, Head of Research at IGI Finex Securities Limited, attributes the increase in overall net sales to higher retail prices. “As a result, the company’s gross margins improved significantly QoQ from 12.54% to 16.67%,” says Khan. He adds that “contained overheads have also played a role in boosting the operating margin from 5.86% to 10.42% QoQ.