1. INDUS MOTOR COMPANY Ltd.
Group Members:
• Asif Ahmed Awan
• Sobia
• Kumail Burney
• Shahzaib Ayyaz
• Ghulam Mustafa
• Ali Raza Alvi
2. Introduction
Indus Motor Company Limited (IMC) is a joint venture between certain companies of
House of Habib of Pakistan, Toyota Motor Corporation (TMC) and Toyota Tsusho
Corporation (TTC) of Japan. Incorporated in 1989, the Company manufactures and
markets Toyota brand vehicles in Pakistan. These include several variants of the flagship
‘Corolla’ and “Yaris” in the passenger car segment, “Hilux” in the light commercial
vehicle segment and “Fortuner” in Sports Utility Vehicle segment.
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3. Introduction
IMC’s manufacturing facility and offices are located at a 109.5 acres site in Port Qasim,
Karachi. The product is delivered to end customers nationwide through a strong
network of 50 independent 3S Dealerships spread across the country.
Over 31 years, since inception, IMC has sold more than 961,500 CBU/CKD vehicles. It
has also demonstrated impressive growth in terms of volumetric increase. From a
modest beginning of 20 vehicles per day production in 1993, daily production capacity
of the Company has now increased to 288 (with overtime) units per day. This has been
made possible through the development of human talent embracing the ‘Toyota Way’
of quality and lean manufacturing.
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4. Introduction
IMC has made large scale investments in enhancing its own capacity and in meeting
customer requirements for new products. Corolla is, today, the largest selling
automotive brand model in Pakistan. This country is the highest Corolla-selling nation in
the Asia-Pacific region and has the distinction of being # 1 in Toyota’s Asian market.
The Company has a workforce of 2,943 persons at year end. It invests heavily in training
the team members and management employees and creating a culture of high
performing and empowered teams who work seamlessly across the various processes in
search of quality and continuous improvement.
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5. FCFF
FREE CASH FLOW METHOD
Intrinsic value (Stock is Under Valued through DCF Model) 1,167.96
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• DIVIDEND DISCOUNT MODEL
• Intrinsic value (Stock is Under Valued through DDM Model) 1,730
DDM MODEL
8. Assumptions
:
Company might face reduction in sales due to economic
condition of Pakistan and restrictions on import
Owing to economic conditions of Pakistan, Interest
rates are likely to be on higher side for at least 2 years
Company's Other Income is only from banks and
Financial Instruments
It is expected that company will have high investment
in fixed income due to higher interest rates
It is expected that interest rates will slide down after 2
years
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9. Assumptions
:
Forecasted values of expenses are calculated based in
average movements in the respective accounts
Since company has very low debt levels through history,
we have not incorporated any debt issue in projections
To accommodate low debt level, WACC has been
calculated based on 1% debt and 99% equity
It is assumed that taxes will be paid in the same
financial year
It is assumed that there will be no new issue of shares
in future
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