Islamabad, Oct 28: Sazgar Engineering Works Limited (PSX: SAZEW) announced its 1QFY25 result where the company recorded earnings of Rs. 4.2 billion (EPS of Rs. 69.77), up 541 percent YoY and 21 percent QoQ.
Alongside its results, the company announced a dividend of Rs. 10/share in 1QFY25 – the first-ever dividend declaration for this period.
Sazgar Net sales increased by 3.3x YoY and 14 percent QoQ to Rs. 26.3 billion in 1QFY25, mainly driven by increased sales of the Haval variants, according to Topline Securities.
The company recorded a significant increase in both three- and four-wheeler sales in 1QFY25, with four-wheeler sales reaching 2,605 units-a 3.5x YoY and 18 percent QoQ growth-while three-wheeler sales rose to 5,435 units, marking an 89 percent YoY and 9 percent QoQ increase.
The company achieved its highest monthly 4-wheeler production in Sep 2024, alongside its second-highest sales. With strong HAVAL demand and ongoing CBU testing for the Tank and Ora models, four-wheeler sales and production are expected to be positive driving Sagar’s growth.
The company recorded gross margins of 28.94 percent in 1QFY25 compared to 29.13 percent in 4QFY24 and 18.78 percent in 1QFY24.
Distribution expenses in 1QFY25 increased by 155 percent YoY but fell 5 percent QoQ to Rs. 740 million. Admin expenses increased by 64 percent YoY and 3 percent QoQ to Rs. 123 million in 1QFY25.
Other income rose 4.1x YoY but fell 16 percent QoQ to Rs. 403 million in 1QFY25.
The effective tax rate in 1QFY25 stood at 36 percent compared to 40 percent in 4QFY24 and 41 percent in 1QFY24.
Topline maintains a buy stance on SAZEW, with the stock currently trading at FY25/26F PE of 3.95/3.26x and a dividend yield of 6 percent/8 percent.
