As the auto sector still looks to reel from the fall in demand, established companies like Indus Motors are looking to chart a new path for themselves. The company recently announced its financial results showing earning per share of Rs 191.76 which has increased by 56% from Rs 122.96 per share last year. The increase in profits comes at a time when the total units sold by the company stood at 20,770 units compared to 31,104 units in the previous year. This shows a concerted effort by the company to increase its profitability by increasing its margins on the cars that it offers in the market. A comparison between last year and this year shows that as the company has looked to markup its price which has allowed it to grow its profits with shrinking volumes. A deeper dive into the figures sheds light on this practice.
In the first quarter of financial year 2023, Indus Motors actually made a gross loss meaning that it sold its cars for a price lower than the cost of production. On average, the company made a loss of Rs 265,000 per unit for each of the cars that it sold. The only saving grace for the company was that it was able to earn Rs 5 billion which allowed the company to show a profit for the quarter. For the same quarter for financial year 2024, the company made an average profit of Rs 731,500 per unit that it sold. This allowed the company to earn profit from its operations. In conjunction with the other income earned, the company was able to make a profit of Rs 3.2 billion for the quarter.
The company was able to change its course from the second quarter of 2023 where the company started to decrease the loss it was making per unit and brought margins to around Rs 52,000 per unit. As the company started to steady the ship to some extent, The content in this publication is expensive to produce. But unlike other journalistic outfits, business publications have to cover the very organizations that directly give them advertisements. Hence, this large source of revenue, which is the lifeblood of other media houses, is severely compromised on account of Profit’s no-compromise policy when it comes to our reporting. No wonder, Profit has lost multiple ad deals, worth tens of millions of rupees, due to stories that held big businesses to account. Hence, for our work to continue unfettered, it must be supported by discerning readers who know the value of quality business journalism, not just for the economy but for the society as a whole.To read the full article, subscribe and support independent business journalism in Pakistan
