IGI Securities Limited – Day Break

Karachi, November 16, 2018 (PPI-OT): Automobile Assemblers – INDU: Swimming with the tide; “BUY” maintained

We revisit our investment case on the scrip after incorporating financial accounts for 1QFY19 and changes in our assumption accordingly. For, the 1QFY19 the company reported earnings of PKR 3.51bn (PKR 44.6/share), led by strong growth in volumetric sales.

We have trimmed down our earnings estimates by 5% for FY19/FY20 and increasing thereof by 2-5% for FY21 onwards. Our revised earnings estimates are PKR (163/171/185)/share for FY19E/FY20F/FY21F.

We still prefer INDU as our top pick in IGI Auto universe with our revised rolled over Dec-19 target price of PKR 1,662.6/share offering +20% upside from its last closing. The company is currently trading at FY19E P/E of 8.3x and offers an estimated dividend yield of 8.5%.