Sazgar Engineering Works (SAZEW) Q2 2024 earnings summary

Executive summary

• Q2 FY24 sales doubled YoY to Rs 6,486.07M; H1 sales rose to Rs 14,530.33M, with H1 profit after tax of Rs 1,414.33M and EPS of Rs 23.40.

• HAVAL SUVs, including HEVs, continued to attract higher-end buyers, with regular orders supporting operations amid pressure on the auto market.

Financial highlights

• Q2 net sales were Rs 6,486.07M vs Rs 3,244.59M YoY; gross profit was Rs 1,607.61M vs Rs 312.13M, and pretax profit was Rs 1,236.38M vs Rs 78.35M.

• H1 net sales were Rs 14,530.33M vs Rs 4,775.08M YoY; gross profit was Rs 3,118.18M vs Rs 505.27M, and pretax profit was Rs 2,345.74M vs Rs 98.63M.

• H1 profit after tax was Rs 1,414.33M vs Rs 79.11M; basic EPS rose to Rs 23.40 from Rs 1.31. Q2 profit after tax was Rs 755.79M vs Rs 68.11M; EPS was Rs 12.50 vs Rs 1.13.

• H1 other income was Rs 186.46M vs Rs 3.77M; finance costs were Rs 71.35M vs Rs 90.76M.

Outlook and guidance

• Expected higher product demand in the next quarter to substantially increase sales volume and profitability.

• Plans to keep adding environmentally friendly vehicles to the product line, with the stated aim of reducing oil imports.

• Management cited improving foreign reserves, lower trade and current account deficits, reduced fuel prices, and agricultural and industrial growth as potential supports for activity.