The automotive sector in Pakistan witnessed impressive growth in the first quarter of FY25, with Indus Motor Company Limited (Toyota) and Sazgar Engineering Works Limited both reporting significant increases in profitability.

These results reflect strong market demand and effective operational strategies, as both companies capitalized on their strengths to drive earnings.

Toyota’s 1QFY25 Earnings Surge

Indus Motor Company Limited, the manufacturer of Toyota vehicles in Pakistan, posted a notable increase in profit after tax (PAT) of Rs. 5.1 billion, a 58% year-on-year (YoY) surge. The company announced a substantial cash dividend of Rs. 39.0 per share, reflecting its strong financial position.

Net sales for the quarter rose by 27% YoY, reaching Rs. 41.6 billion, largely driven by increased volumetric sales of 6,160 units, up from 4,511 units in the same period last year.

This growth in sales was attributed to higher demand for Toyota’s sedan models, including the Corolla and Yaris, which took center stage during the quarter. However, the revenue declined by 23% on a quarter-on-quarter (QoQ) basis, due to a 16-day plant shutdown, which impacted production.

Toyota’s gross margins for the quarter stood at 13.4%, an improvement from 10.1% YoY. This increase was supported by a stable Pakistani rupee against the US dollar and better margins on the Corolla Cross.

Despite these positives, gross margins saw a slight dip on a QoQ basis, driven by the higher sales mix of lower-margin sedan models.

Sazgar Engineering’s Record-Breaking Quarter

Sazgar Engineering Works Limited also posted exceptional results, with a record 541% YoY increase in earnings, reaching Rs. 4.2 billion in 1QFY25. On a QoQ basis, the company’s profit grew by 21%.

This strong performance was supported by a surge in sales of both three- and four-wheeler vehicles. The company sold 2,605 four-wheelers, a 3.5% YoY growth, and 5,435 three-wheelers, marking an 89% YoY increase.

Net sales for Sazgar jumped by 3.3% YoY to Rs. 26.3 billion, driven by robust demand for Haval vehicles and continued production growth. Notably, Sazgar achieved its highest monthly production for four-wheelers in September 2024, highlighting its operational efficiency and market demand.

Sazgar also declared its first-ever dividend for 1QFY25, distributing Rs. 10 per share, showcasing its financial stability.

Both Toyota and Sazgar’s impressive 1QFY25 results underscore the strength of Pakistan’s automotive sector, driven by increased vehicle demand and strategic product offerings.