True, the 2016 calendar year for PSMC has been tough, but not because of falling demand for its cars. Once the Punjab Rozgar scheme wrapped up that brought the demand for an additional 50,000 Bolan and Ravi variants, business seemed to go down. In fact, between CY15 and CY16, PSMC saw a drop in its bottom line by 53 percent. Things are now looking up.

Not only there is hope, there is an abundance of it. The company saw an increase in sales for all variants, including Swift, Mehran, Cultus and WagonR in the first quarter of the calendar year except Bolan and Ravi. WagonR is the star in the car segment, which is fast gaining popularity in the middle class urban localities where smaller compact cars like Diahtsu’s Mira are all the rage.

Strong sales have contributed to a 19 percent growth in revenues; and nearly a 40 percent growth in the bottom-line. Adding more news to the sector that is already abuzz, the company just launched 1000cc Cultus, which would propel sales forward. Meanwhile, its imported car recently introduced, Suzuki Ciaz is also a strong contender in the large cars segment though we are unsure whether the company would start producing them locally. The company has been going back and forth with the government on its prospective investment of nearly $600 million into new plants and models. It is unclear whether it will get the incentives it seeks from the government but the sector is ripe for the taking. Existing players have an advantage over any new players entering the sector, but they also must not be complacent. In any case, no one can accuse PSMC for being that. It has been active, and from its financials, we can tell it is also back in the game.

====================================================


PSMC QUARTER ENDING MARCH 2017


====================================================


(Rs mn)                    Jan-Mar    Jan-Mar    YoY


                              2017       2016


====================================================


Sales                     23,890.8   19,993.6    19%


Cost of Sales             20,986.6   17,789.6    18%


Gross Profit               2,904.2    2,204.0    32%


Distribution cost            706.8      463.5    53%


Administrative cost          320.8      441.8   -27%


Finance cost                  28.0       81.3   -66%


Other operating income       185.4      279.4   -34%


Profit before taxation     1,893.7    1,393.6    36%


Taxation                     587.0      446.0    32%


Profit after taxation      1,306.6      947.6    38%


Earnings per share (Rs)      15.88      11.51    38%


GP Margin                      12%        11%


NP Margin                       5%         5%


====================================================