Sazgar Engineering Works Limited reported earnings per share of PKR 131.29 in FY24 against earnings per share of PKR 16.46 in FY23 an increase of 698%.
Total revenue in FY24 reached PKR 57.6 Bn against PKR 18.2 Bn in FY23, an increase of 217%. The company saw its gross margin increase from 14% in FY23 to 27% in FY24.
In this fiscal year the company has seen its margin further expand to 33% in 3QFY25 The company is currently in the process of expanding its capacity through a capex of PKR 11.5 Bn. This expansion will include the following:
1. Expansion of existing paint shop
2. Construction of new warehousing facilities
3. Installation of 5.7 MW solar system
4. Construction and installation of new manufacturing facilities for the local assembly of New Energy Vehicles.
SAZEW expects that post expansion, its daily production will rise from about 40 vehicles per day to 90 vehicles per day. This capex is in anticipation of increased competition as the company tries to be the first mover in yet another category of NEVs. The first rollout of CKD NEV model is expected by March 31, 2026.
The company is also in the process of expanding its domestic dealership network with a new one opened in Mardan recently and the Peshawar location is expected to open next month. The company is also running a pilot program to test EV rickshaws for Yango in Lahore’s Gulberg area. Moving forward, the company is optimistic about its prospects to export EV rickshaws.
Management apprised that the government is working on new policies however clarity has not been provided and therefore is it difficult to anticipate the impact of the same. It was also revealed that it would be difficult to export 4 wheelers from Pakistan due to low volumes which do not allow Pakistan to produce parts at scale. As a result, local production is not price competitive on a global scale.
The management expects that the launch of their new energy vehicles lineup will help cement its place in the segment and further enhance profitability in the years to come.
Important Disclosures
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