Pak Suzuki posted an impressive sales performance in May-12 (up 33% YoY), however we continue to believe potential headwinds are likely to affect sales growth going forward, due to ban on CNG kits and potential relief in CBU duties. Hence we maintain our estimate of 26% HoH decline for now.
However we would closely track granular details on two recent developments to gauge whether a revisit is warranted: 1) Continuation of the Punjab Taxi Scheme in FY13, as announced in Punjab budget and 2) realignment of product profile where PSMC plans to phase out Alto July-12 onwards.
We also highlight that the recent price increase of PRs35,000 on Mehran, Bolan and Ravi and PRs20,000 for Cultus effective June 11th should be margin neutral, as it is a pass-on of the impact of conversion to Euro-II compliant vehicles.
However given the latest price hike, the ability to pass-on any cost pressures could reduce going forward. Reiterate cautious stance on the stock, given that any potential 2Q result-related excitement could be short-lived, in our view.
No comments:
Post a Comment