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Agriauto Industries Limited (PSX: AGIL) was incorporated in Pakistan as a public limited company in 1981. The principal activity of the company is the manufacturing and sale of components for motorcycles, agricultural tractors and automotive vehicles. Pattern of Shareholding As of June 30, 2025, AGIL has a total of 36 million shares outstanding which are held by 3,668 diverse shareholders. Foreign investors represent the largest shareholding category of AGIL holding around 42.24 percent shares followed by local individuals accounting for 35 percent shares of the company. Thal Limited which is an associated company of AGIL owns 7.35 percent of its shares while financial institutions have 7.20 percent stake in AGIL. Joint stock companies and Mutual funds have a stake of 3.93 percent and 3.59 percent respectively in AGIL. The remaining ownership is distributed among other categories of shareholders. Historical Performance (2019-24) Over the period under consideration, AGIL’s topline plunged in 2020 and 2023. AGIL reported net losses in 2020, 2023 and 2024. AGIL’s margins which had been narrowing down until 2020, registered staggering recovery in 2021. However, the upturn couldn’t prove to be sustainable as margins drastically fell in the subsequent three years. In 2025, all the margins ticked up (see the graph of profitability ratios). The detailed performance overview of the company is given below. In 2019, AGIL’s topline grew by 16.51 percent year-on-year to clock in at Rs.7122.49 million. This was despite the fact that the automobile industry witnessed considerable decline in volumes on account of upward price revisions, high cost of borrowing as well as tightening of imports. The same reasons also squeezed the gross profit of AGIL by 3.34 percent year-on-year in 2019 and pushed its GP margin down to 15.14 percent from GP margin of 18.25 percent posted in 2018. Distribution cost grew by 8.33 percent year-on-year in 2019 on account of high freight charges, advertisement and promotion expense as well as provision for warranty claims. Higher payroll expense drove the administrative expense up by 10.32 percent year-on-year in 2019. This was despite workforce contraction in 2019. AGIL recorded net other income of Rs.84.16 million in 2019 as against net other expense of Rs.16.49 million posted in 2018. This was primarily the result of hefty dividend income from Agriauto Stamping Company (Private) Limited, the wholly owned subsidiary of AGIL. This significantly buttressed the operating results of the company. AGIL registered 4.15 percent year-on-year growth in its operating profit in 2019. However, OP margin fell to 11.31 percent in 2019 from OP margin of 12.65 percent recorded in 2018. The company was able to cut down its finance cost by 6 percent year-on-year in 2019 despite monetary tightening. It is pertinent to note that the company had not obtained any external borrowings as its liquidity position was strong enough to meet its financing needs (see graph of liquidity ratios). The drop in finance cost was the result of a plunge in deferred taxation due to deductible temporary differences arising due to provisions. AGIL’s net profit grew by 15.87 percent year-on-year in 2019 to clock in at Rs.603.01 million with NP margin of 8.47 percent versus NP margin of 8.51 percent recorded in 2018. EPS also grew from Rs.18.07 in 2018 to Rs.20.94 in 2019. In 2020, the local and global economy faced grave challenges on account of COVID-19. The global pandemic not only shook the well-being of people but also took a severe toll on business activity on account of lockdowns as well as depressed demand. AGIL’s topline slipped by 47 percent year-on-year to clock in at Rs. 3768.76 million. This was due to decelerated performance of automobile sector on account of increase in custom duties, imposition of FED on locally manufactured vehicles and the restriction of sales to non-filers. Cost of sales also dropped, however, with a lower magnitude of 40.45 percent as the inventory levels greatly increased, resulting in higher inventory holding cost. Moreover, Pak Rupee depreciation for most part of the year also inflated the cost. This compressed the gross profit by 84.24 percent year-on-year, with GP margin drastically falling to 4.51 percent in 2020. Distribution expense tapered off by 44.96 percent year-on-year in 2020 due to considerably lesser advertisement and promotion campaigns assumed during the year coupled with lower freight charges on account of curtailed sales volume. The company laid off many employees during the year as it human resource tally declined from 709 in 2019 to 617 in 2020. This resulted in 1 percent lesser administrative cost incurred in 2020. AGIL recorded net other income of Rs.140.40 million in 2020, up 66.83 percent year-on-year. This was the result of lower provisioning done for WWF and no provisioning done WPPF and ECL in 2020. Despite keeping a check on its operating expenses, operating profit plummeted by 98.34 percent year-on-year in 2020 with OP margin shrinking to 0.36 percent. Finance cost grew by 852.55 percent year-on-year in 2020, however, in absolute terms, it stood at a mere Rs.2.99 million, representing 0.07 percent of AGIL’s topline in 2020. The increase in finance cost was due to lease arrangements done by the company for its offices and warehouse. AGIL’s posted net loss of Rs.29.798 million in 2020 with loss per share of Rs.1.03. 2021 proved to be the year of revival for AGIL and made up for its losses and dismal sales performance in the past year. In 2021, AGIL registered a splendid year-on-year growth of 84.94 percent year-on-year in its topline which clocked in at Rs.6969.98 million. This was the result of resurgence in agricultural and industrial activity in 2021. Favorable foreign exchange parity and low interest rate instilled growth in the automobile sector. The government also provided tax reliefs on cars with low engine capacity of 1000 cc, resulting in 61 percent higher sales volume of passenger cars in 2021. Moreover, FED was reduced to 2.5 percent across all the car segments. The company kept a check on its cost which was further supported by appreciation in the value of local currency. This translated into 481.70 percent year-on-year growth in gross profit with GP margin jumping up to 14.18 percent in 2021. Distribution expense spiked by 63.78 percent year-on-year in 2021 due to rigorous advertising and promotion campaigns launched during the year coupled with higher freight and forwarding charges. Administrative expense slid by 13.54 percent year-on-year in 2021 due to considerably lower legal and professional charges incurred during the year. Employee headcount grew to 727 in 2021. Net other income grew by 14 percent year-on-year in 2021 on account of higher dividend income from its subsidiary. Operating profit multiplied by 6144.34 percent in 2021 with OP margin rising up to 12 percent. Finance cost grew by 4.65 percent year-on-year in 2021 despite monetary easing due to increase in lease liabilities coupled with the attainment of short-term running finances in 2021. AGIL posted net profit of Rs.651.40 million in 2021, the highest among all the years under consideration, with an unparalleled NP margin of 9.35 percent and EPS of Rs.22.62. In 2022, AGIL’s topline measured up by 28.52 percent year-on-year to clock in at Rs.8957.55 million. However, stronger topline couldn’t trickle down into bottomline growth on account of higher cost of sales, elevated cost of borrowing, record high inflation and drastic depreciation of Pak Rupee. The topline growth was the consequence of improved automobile sales during the first 10 months of FY22 on account of all-time high sales of passenger cars. Then SBP intervened and put restrictions on import of CKD units to safeguard the diminishing foreign exchange reserves of the country. This put a dent on the production and sales of automobiles towards the end of FY22. Cost of sales grew by 32.73 percent year-on-year in 2022 on account of Pak Rupee depreciation and import restrictions which created supply chain impediments for AGIL. Gross profit inched up by 3 percent year-on-year in 2022, however, GP margin marched down to 11.37 percent. Distribution expense magnified by 15.22 percent year-on-year in 2022 due to higher freight charges on account of increased sales volume and rise in the prices of POL products. Focused advertisement campaigns also contributed towards higher distribution expense in 2022. Number of employees grew from 990 in 2021 to 1061 in 2022, resulting in higher payroll expense which drove up administrative expense by 23.58 percent in 2022. AGIL incurred net other expense of Rs.131.48 million in 2022 due to massive exchange loss incurred on foreign currency transactions. Operating profit tapered off by 38.91 percent year-on-year in 2022 with OP margin slipping to 5.71 percent. Finance cost hiked by 1593.35 percent year-on-year in 2022 as the company’s short-term financing greatly increased during the year and it also availed SBP refinance scheme for renewable energy. The bottomline declined by 53.33 percent year-on-year in 2022 to clock in at Rs.304.009 million with NP margin of 3.40 percent and EPS of Rs.8.44. The automobile sales which started dropping towards the end of 2022 further worsened in 2023 on the back of import restrictions, tapering of auto financing due to higher discount rate and also because of imposition of new taxes in the latest budget. The devastating floods in the 1HFY23 wreaked havoc in the agricultural regions and took its toll on the tractor sales. The sluggish performance of automobile sector had the direct negative effect on the off-take AGIL. AGIL’s net sales declined by 40.43 percent to clock in at Rs.5336.12 million in 2023. Due to lower production and sales volumes, cost of sales also slid, albeit with a lower magnitude of 35.55 percent year-on-year. Gross profit measured down by 78.51 percent year-on-year in 2023 with GP margin narrowing down to 4.10 percent. Due to demand destruction, the company greatly reduced its advertising budget in 2023. This coupled with lower freight cost resulted in 28.92 percent plunge in distribution expense in 2023. AGIL significantly trimmed down its workforce to 770 in 2022, however, inflation didn’t allow administrative cost to shrink accordingly and it stayed almost at the same level as it was in 2022. As against 2022, where the company booked net other expense due to high exchange loss, in 2023, AGIL posted net other income of Rs.162.81 million on account of encouraging dividend income from Agriauto Stamping Company (Private) Limited. However, this couldn’t do any good to the operating results of the company. AGIL’s operating profit slid by 91.29 percent year-on-year in 2023 with OP margin drastically falling down to 0.84 percent. Finance cost escalated by 45.59 percent year-on-year in 2023 due to higher discount rate coupled with increased long-term financing obtained under SBP refinance scheme for renewable energy. AGIL incurred net loss of Rs.44.28 million in 2023 with loss per share of Rs.1.23. AGIL recorded 11.1 percent year-on-year growth in its net sales which clocked in at Rs.5927.23 million in 2024. Due to continued decline in the OE business, the company started focusing on the replacement market and introduced new models in its aftermarket portfolio. The company also targeted the UAE market in 2024 and recorded export sales worth $100,000 in 2024. The company also diversified into dye developing business in 2024. Cost of sales hiked by 11.77 percent in 2024 due to heightened energy tariff and increase in the prices of raw materials. Gross profit slid by 5 percent in 2024 with GP margin sliding down to 3.51 percent. Distribution expense multiplied by 36.16 percent in 2024 possibly due to increased advertisement and promotion budget as well as higher carriage & forwarding charges. Administrative expense ticked up by 7.92 percent in 2024 due to higher payroll expense on account of inflationary pressure. This was despite the fact that the company streamlined its workforce from 698 employees in 2023 to 666 employees in 2024. Stability in the value of local currency and no provisioning done for WWF and WPPF led to 96.60 percent drop in other expense in 2024. Other income also plummeted by 87.56 percent in 2024 due to high-base effect as the company received hefty dividend from Agriauto Stamping Company (Private) Limited in 2023. The company recorded operating loss of Rs.153.57 million in 2024 versus operating profit of Rs.44.56 million recorded in the previous year. Finance cost also surged by 47.20 percent in 2024 on account of higher discount rate and increased utilization of working capital lines.Debt-to-equity ratio surged from 42 percent in 2023 to 52 percent in 2024. AGIL posted net loss of Rs.275.718 million in 2024 with loss per share of Rs.7.66. Recent Performance (2025) In 2025, AGIL’s net sales posted a staggering year-on-year growth of 30.96 percent to clock in at Rs.7762.17 million. Improvement in the macroeconomic indicators since the beginning of the year instilled enhancement in the economic activity. Lower financing rates pushed up the automobile demand. New competitors also entered the market, providing customers with wide array of choices which led the existing players to keep the prices in check. AGIL drove up its topline through increased sales volume and efficient sales mix with enhanced focus on passenger cars and two-wheeler sales. This enabled the company to record 71.97 percent higher gross profit in 2025 with GP margin ticking up to 4.60 percent. Higher sales volume and focused advertising & promotion campaigns resulted in 33.44 percent greater distribution expense in 2025. Administrative expense also picked up by 21.86 percent in 2025 due to higher payroll expense. Other expense surged by 962.43 percent in 2025 owing to exchange loss on foreign currency transactions. However, other expense was conveniently offset by 1191.82 percent higher other income registered in 2025 on the back of hefty dividend income from subsidiary company recognized during the year. AGIL’s subsidiary company, Agri Auto Stamping Company (Private) Limited diversified its product mix during the year and expanded into high-tensile sheet metal processing which led to stronger profit margins. AGIL posted operating profit of Rs.251.19 million in 2025 as against operating loss of Rs.153.57 million recorded in 2024. OP margin was recorded at 3.24 percent in 2024. Despite monetary easing, finance cost escalated by 35.41 percent in 2025 due to higher utilization of working capital lines. Debt-to-equity ratio mounted to 65 percent in 2025. AGIL posted net profit of Rs.98.975 million with EPS of Rs.2.75 in 2025. This was against net loss of Rs.275.718 million and loss per share of Rs.7.66 posted in 2024. NP margin clocked in at 1.28 percent in 2025. Future Outlook Surge in the automotive volumes due to historically low level of inflation and discount rate will drive the demand of AGIL products. Improved availability of CKD units due to ease of import restrictions will also result in the improvement in capacity utilization of auto industry. On the flipside, changes under National Tariff Policy 2025-26, NEV policy and liberalization on the import of used cars will take its toll on the business volume of auto parts manufacturers. AGIL is also enhancing its dye manufacturing capability in order to diversify its offerings.
