Loads Limited

Loads Limited (PSX: LOADS) was incorporated in Pakistan as a private limited company in 1979 and was later converted into a public limited company in 1994. The company is engaged in the manufacturing and sale of radiators, exhaust system, sheet metal components and other parts for automobile industry. Pattern of Shareholding As of June 30, 2025, LOADS have a total of 251.250 million shares outstanding which are held by 8273 shareholders. Local general public has the majority stake of around 38.33 percent in the company followed by Directors, CEO, their spouse and minor children holding around 37.80 percent shares. Associated companies, undertakings and related parties account for 12.55 percent of the outstanding shares of LOADS. The remaining shares are held by other categories of shareholders. Historical Performance (2019-25) The topline of LOADS slid thrice during the period under consideration i.e. in 2020, 2023 and 2024. Its bottomline dropped until 2020 to record net loss during the year. In 2021 and 2022, LOADS’s bottomline recovered from net loss and registered growth. LOADS posted net loss yet again in 2023 followed by net profit in 2024. In 2025, net profit thinned down. The gross margin of the company hit its lowest level in 2020 and maxed out in 2025. Conversely, its operating and net margins touched their lowest level in 2023 and then peaked in 2024. In 2025, LOADS’s operating margin stayed intact while its net margin plunged (see the graph of profitability ratios). The detailed performance review of the period under consideration is given below. In 2019, LOADs’s topline recorded year-on-year growth of 16.77 percent to clock in at Rs.5709.74 million. This came on the back of upward price revision to justify depreciation of Pak Rupee. Moreover, the topline growth was also the result of addition of converters in Suzuki products and hefty growth in Toyota Corolla sales. Gross profit jumped up by 39 percent year-on-year in 2019 with GP margin clocking in at 9.1 percent versus GP margin of 7.64 percent recorded in 2018. Operating expense rose by 5.43 percent year-on-year in 2019 due to inflationary pressure. Conversely, other expense gave a breather and plunged by 22.67 percent year-on-year in 2019 due to high-base effect as the company recorded loss on sale of investment in Pakistan Investment Bonds in 2018. Other income almost remained intact in 2019. Operating profit boasted a stunning year-on-year growth of 60.47 percent in 2019 with OP margin clocking in at 6.66 percent versus OP margin of 4.85 percent posted in 2018. Finance cost mounted by 124.43 percent year-on-year in 2019 on account of higher discount rate coupled with increase in short-term financing facilities availed during the year. This coupled with minimum tax on turnover culminated into bottomline plunge of 48.70 percent year-on-year to clock in at Rs.41.22 million in 2019. This translated into EPS of Rs.0.27 in 2019 versus EPS of Rs.0.53 recorded in the previous year. NP margin also narrowed down to 0.72 percent in 2019 versus NP margin of 1.64 percent recorded in 2018. In 2020, COVID-19 struck and the automobile sales crashed by 53 percent year-on-year. This produced a direct impact on the sales of LOADS which tapered off by 51.34 percent year-on-year to clock in at Rs.2778.63 million in 2020. Low off-take across the categories also produced a downward effect on the cost of sales. Gross profit thinned down by 61.85 percent year-on-year in 2020 with GP margin clocking in at 7.13 percent. Low outward freight, vehicle running and travelling cost, advertising and sales promotion as well as employee benefits squeezed the operating expense by 4.4 percent year-on-year in 2020. Other expense posted a drastic 87.57 percent year-on-year drop as the company didn’t book any provision for WWF and WPPF during the year. Other income multiplied by 126.67 percent during the year as the company recognized markup income on loans to its subsidiaries. Despite cost curtailment and a check on operating expense, operating profit shrank by 56.47 percent year-on-year in 2020 with OP margin of 5.96 percent. To top it off, finance cost grew by 45.70 percent year-on-year in 2020 due to discount rate hike in the first three quarters of 2020 coupled with long-term loans facilities availed by the company from commercial banks and ORIX leasing Pakistan Limited to manage its cash flow and working capital requirements. LOADS also availed SBP refinance scheme in 2020 for the payment of wages and salaries. This put further dent on the bottomline which posted net loss of Rs.137.33 million in 2020. Loss per share clocked in at Rs.0.91 in 2020. In 2021, the signs of COVID-19 began to melt away with a significant reduction in discount rate which spurred auto financing. The automobile sector registered a boom of 62 percent year-on-year in 2021. This resulted in growth of 69.77 percent year-on-year in the topline of LOADS which clocked in at Rs.4717.23 million in 2021. Pak Rupee depreciation took its toll on the cost of raw materials consumed during the year. Moreover, toll manufacturing, utility charges, salaries and wages etc also soared which drove the cost of sales up by 67.40 percent year-on-year in 2021. Gross profit grew by 100.62 percent in 2021 which resulted in GP margin ticking up to 8.42 percent. Rise in advertisement and promotion budget as well as outward freight raised the operating expense by 4 percent year-on-year. The impairment loss on trade receivables booked by LOADS in 2020 was reversed in 2021 due to recovery of outstanding receivables as the economy began to show signs of recovery. Other expense recorded a hefty rise of 297.34 percent in 2021 on the back of higher provisioning done for WWF and WPPF. Other income also recorded a rise of 15.49 percent in 2021 on the back of exchange gain, gain on disposal of fixed assets and reversal of provisions against inventory. Operating profit posted a staggering year-on-year rise of 140.45 percent in 2021 with OP margin clocking in at 8.4 percent – almost the same as GP margin for the year. Finance cost contracted by 37.94 percent year-on-year in 2021 due to downward revision in discount rate coupled with a drop in the outstanding loan portfolio of LOADS. The bottomline recorded net profit of Rs.123.88 million in 2021 with EPS of Rs.0.62. NP margin stood at 2.63 percent in 2021. In 2022, the boom of automobile industry continued whereby it registered a volumetric growth of 53 percent over previous year. This also provided impetus to the sales of LOADS which posted growth of 65.18 percent year-on-year to clock in at Rs.7791.96 million in 2022. Soaring inflation as well as Pak Rupee depreciation pumped up the cost of sales by 61.60 percent in 2022. Moreover, high toll manufacturing charges, salaries and wages as well as other employee benefits also played their part in escalating the cost of sales. However, upward price revisions and handsome volumes drove gross profit up by 104.11 percent in 2022 with GP margin clocking in at 10.41 percent. While operating expense posted a momentous growth of 40.82 percent in 2022, it was counterbalanced by a stunning growth in other income on account of markup earned on loans to subsidiaries. Operating profit boasted a growth of 114.15 percent in 2022 with OP margin of 10.94 percent, even higher than the GP margin recorded during the year – thanks to other income. Finance cost mounted by 70.51 percent in 2022 on the back of higher discount rate coupled with increased borrowings during the year. Bottomline grew by 115.67 percent in 2022 to clock in at Rs.267.17 million in 2022 with EPS of Rs.1.06. NP margin stood at 3.43 percent in 2022. In 2023, LOADs’s topline shrank by 42.33 percent to clock in at Rs.4493.83 million. This was the result of slowdown in the auto industry on the back of high financing rates, low purchasing power of consumers and import restrictions imposed by the Central Bank. Cost of sales slid by 46.13 percent in 2023, resulting in 9.62 percent plunge in gross profit in absolute terms. However, GP margin greatly improved during the year to clock in at 16.31 percent. Operating expense remained intact at the last year’s level owing to cost control measures put in place by the company. One such measure was the downsizing of its workforce from 733 employees in 2022 to 382 employees in 2023 which greatly curtailed the payroll expense. No profit related provisioning done during the year resulted in 82.94 percent decline in other expense in 2023. Other income strengthened by 68.42 percent in 2023 due to higher mark-up income recognized on loans to subsidiaries and greater gain recorded on the disposal of property, plant and equipment during the year. The major downbeat factor which resulted in operating loss in 2023 was the booking of provision for impairment in equity investment and mark-up recoverable from its associated company, Hi-Tech Alloy Wheels Limited (HAWL) to the tune of Rs.859 million and ECL against loan to HAWL to the tune of Rs.1345 million respectively. This was due to delay in the commissioning of its operations due to downturn of the auto industry. As a consequence, LOADS posted operating loss of Rs.1173.85 million in 2023. Finance cost also surged by 56.91 percent in 2023 due to high discount rate. Net loss clocked in at Rs.1255.67 million in 2023 with loss per share of Rs.5. In 2024, LOADS’s topline remained intact at the last year level of Rs.4.49 billion. The slump in auto industry sales continued to take its toll the volumes of LOADS in 2024. On the positive note, the appreciation in the value of local currency reduced the cost of sales by 3.96 percent in 2024, resulting in 19.87 percent improvement in gross profit in absolute terms. GP margin also attained an unprecedented level of 19.56 percent in 2024. The company kept a check on its operating expense which dipped by 1.20 percent in 2024. ECL against loan to subsidiary company, HAWL also increased by 12.98 percent in 2024. Other expense mounted by 456.82 percent in 2024 due to higher provisioning booked for WWF and WPPF. However, operating expense and other expense were offset by a staggering 221.69 percent rise in other income recorded during the year. This was primarily the result of gain on disposal of Korangi land and building coupled with mark-up income recorded on loans to subsidiaries. LOADS posted operating profit of Rs.884.28 million in 2024 with OP margin of 19.69 percent. Finance cost ticked up by 4.89 percent in 2024. The outstanding liabilities of LOADS greatly reduced during the year resulting in gearing ratio of 29 percent in 2024 versus gearing ratio of 44 percent recorded in the previous year. The company posted net profit of Rs.826.59 million in 2024 with EPS of Rs.3.29 and NP margin of 18.41 percent. In 2025, LOADS’s net sales strengthened by 34.35 percent to clock in at Rs.6032.90 million. This came on the back of robust demand from OEM which is reflective of the recovery of automobile sector during the year. Exhaust systems make up the biggest chunk of LOADS’s sales and posted year-on-year growth of 40 percent to clock in at Rs.3705 million in 2025. This was followed by sheet metal component sales which grew by 22 percent to clock in at Rs.2096 million and radiator sales which grew by 78 percent to clock in at Rs.231 million in 2025. Cost of sales grew by 30 percent in 2025. Stronger exchange rate and lower inflation enabled the company to control in cost and recorded 52.27 percent stronger gross profit in 2025. GP margin attained its optimum level of 22.17 percent in 2025. Operating expense surged by 32 percent in 2025 mainly on the back of higher payroll expense, outward freight expense, legal & professional charges as well as advertising & sales promotion expense incurred during the year. ECL against loan to subsidiary (HAWL) dipped by 64.73 percent in 2025. Increased profit related provisioning resulted in 83.63 percent surge in other expense in 2025. Other income deteriorated by 56.54 percent in 2025, however was huge enough to counterbalance operating and other expense entirely. The deterioration in other income was the result of lower mark-up income on loans to subsidiaries. LOADS recorded 34.61 percent higher operating profit in 2025 with OP margin staying largely intact at the last year level of 19.70 percent. Finance cost slid by 37.32 percent in 2025 due to monetary easing and lesser outstanding borrowings. Despite all these factors, LOADS’s net profit deteriorated by 40 percent to clock in at Rs.495.22 million in 2025. This was not due to operational inefficiency but due to high-base effect as the company recognized deferred tax asset on a higher amount of ECL on principal amount of loan recoverable from HAWL as per the requirements of IFRS. EPS was recorded at Rs.1.97 while NP margin tumbled to 8.21 percent in 2025. Recent Performance (9MFY26) During the nine-month period of the ongoing fiscal year, LOADS recorded 30.17 percent year-on-year improvement in its topline which clocked in at Rs.5657.66 million. While local sales were the main growth propeller, the company also registered export sales to the tune of Rs.6.02 million in 9MFY26. Robust local sales came on the back of increased demand from OEMs due to the revival of automobile sector. Sale of exhaust systems, sheet metal components and radiators grew by 29 percent, 30 percent and 54 percent respectively in 9MFY26. Sales mix optimization, stable exchange rate and higher absorption of fixed cost due to superior capacity utilization resulted in 27.82 percent improvement in gross profit in 9MFY26 with GP margin staying largely intact at around 21 percent. Augmented production operations and sales volume pushed up operating expense by 42.27 percent in 9MFY26. ECL against mark-up receivable from HAWK dipped by 30.70 percent in 9MFY26. Other expense escalated by 24.57 percent in 9MFY26 likely due to increased provisioning done for WWF and WPPF. Other expense was completely offset by other income of Rs.345.15 million recognized in 9MFY26, resulting in net other income of Rs.298.14 million, down 40.55 percent year-on-year. The decline in net other income in 9MFY26 was due to massive decline in gain on sale of property, plant and equipment, lesser mark-up income on loan to subsidiaries and lesser unrealized gain on the re-measurement of investments in 9MFY26. LOADS’s operating profit ticked up by 11.37 percent in 9MFY26 with OP margin clocking in at 15.24 percent versus OP margin of 17.81 percent recorded in 9MFY25. Finance cost ticked down by 11.86 percent in 9MFY26 due to monetary easing. This was despite massive increase in external short-term borrowings during the period. Net profit multiplied by 33.33 percent to clock in at Rs.380.945 million in 9MFY26. This translated into EPS of Rs.1.40 and NP margin of 6.73 percent in 9MFY26 versus EPS of Rs.1.06 and NP margin of 6.57 percent registered in 9MFY25. Future Outlook Enrichment of auto industry on the back of improvement in investor sentiment, introduction of new models and variants and growing vehicle base augur well for LOADS’s volumes. Lately, stability of Pak Rupee, declining interest rate as well as downtick in inflation also provided considerable support to the local industry and buttressed LOADS’s volumes. On the flipside, the permission for the commercial import of up to five year old vehicles tends to hurt the local automobile industry as well as ancillary industries which have endured a sustained period of thin volumes and under-utilization of their capacities. Moreover, regional tensions may suppress the local currency by inflating the energy import bill, driving up inflation and reversing the monetary easing cycle. This may also hurt the local automobile industry. To counter this risk, LOADS in efficiently building its room in after market and strengthening its foothold in the export market.

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