The Pakistani automotive industry has been facing a downturn for the past few months, and Baluchistan Wheels Limited (BWHL) is not immune to its effects. In a recent announcement to the Pakistan Stock Exchange, BWHL stated that it will be observing non-production days (NDPs) from April 7 till after the Eid holidays due to reduced orders from its clientele across various original equipment manufacturers (OEMS).
Baluchistan Wheels Limited was initially established to manufacture steel wheels for automobiles. However, it has now diversified and produces a wide range of wheels for passenger cars, commercial vehicles, agricultural tractors, and 4×4 vehicles, catering to both domestic and international clientele. Unfortunately, the current situation has not been favorable for the company. This is not the first time that BWHL has made such a decision, as it had previously observed NDPs from December 12 to January 6.
The company’s financial report for Q2FY23 reveals the extent of its troubles. The report showed a sharp decline in revenue, gross profit, and net profit. Consolidated revenue for the period dropped by 32% compared to the same period last year, and sales of car wheels saw a considerable decrease of 25%. The sales of truck/bus wheels and tractor wheels also declined by 2% and 55%, respectively. All these declines contributed to the overall decrease in revenue. The primary reason for the decline in gross profit and net profit during the period was the depressed demand for wheels in all segments.
The Pakistan Automotive Manufacturers Association recently released sales data for the four-wheel industry in February, which showed a significant 44% year-on-year decrease from the same period last year. This paints a bleak picture of the economic climate, and the outlook for March and the coming months does not look promising in terms of sales.
The situation does not bode well for Baluchistan Wheels Limited, as it may face even more non-performing debts (NPDs) if recovery does not take place soon. However, BWHL remains a well-known and trusted name in the industry, and we hope they will weather this storm and come out even stronger.
