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Dolat Capital Report
SML Isuzu Ltd. reported a dismal performance in Q1 FY20.
Revenue stood at Rs 287 million (down 94% YoY) attributed to sharp 95% fall in volume (202 units) offset by increase in net ASP because of better spare parts revenue.
Bus to truck volume mix was in ratio of 44:56 with market share of 7.8% in the bus segment.
Ebitda loss stood at Rs 357 million attributable to high raw material costs and negative operating leverage.
The company reported net loss of Rs 523 million due to poor operating performance.
We continue to maintain negative view as FY21 could be tough year as challenges persist in the form of regulatory changes (cost rise due to the move from BS-IV to BS-VI) and negative economic impact of Covid-19.
As schools and colleges remain shut, we do not see any revival in demand in the bus segment in H2 FY21.
The increasing penetration of electric vehicles in bus segment and rising competitive intensity are key threats for the company.
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