Ifad Autos flies high amid confusion over Royal Enfield

Ifad Autos soared 24 per cent on the Dhaka Stock Exchange (DSE) last week after another company of the same owning company launched India-made motorcycle Royal Enfield.
Ifad Motors that is importing motorcycles of the particular brand has no stake in Ifad Autos or vice versa. Hence, the sales of Royal Enfield will not have any impact on the financial performance of Ifad Autos.
After running advertisements for weeks, Ifad Motors launched Royal Enfield on October 22.
Ifad Autos was Tk 22 per share on the DSE on October 17 and then jumped to Tk 27.3 per share by Thursday last week. Its price-to-earnings ratio now stands at 410.
This price hike of Ifad Autos happened at a time when the equity market was in a bearish mode.
The main board of the prime index lost nearly 150 points or 2.7 per cent since October 17. During the period, nearly 80 per cent of the stocks endured correction.
On October 21, Ifad Motors officially launched four Royal Enfield motorcycle models in Bangladesh. The models -- Hunter, Classic, Bullet, and Meteor -- are priced between Tk 3.4 lakh and Tk 4.35 lakh, with prices varying based on colours.
The demand for the motorcycles seems to be high with bookings going on since the launch.
Meanwhile, the trade volume of Ifad Autos increased from 0.13 million on October 21 to 1.59 million on October 23.
Ifad Autos' Chief Financial Officer (CFO) Sohadeb Kumar Das told The FE that though Ifad Motors is a company owned by the same group as Ifad Autos, revenue and profit of the former will have no impact on the latter.
Financial performance of Ifad Autos
Financial performance of Ifad Autos has remained poor for the last few years as the dollar gained strength.
IFAD Autos engages in importing, marketing, and bodybuilding models of Ashok Leyland's vehicles. Its products include buses, open trucks, covered vans, light commercial vehicles, special application vehicles, and tractors.
"FY24 was an election year. Our revenue fell this year, and our loss slightly increased. We will declare a nominal dividend for this year," said the CFO.
Ifad Autos suffered a loss of Tk 154 million in FY23 and declared a 10 percent cash dividend for the year.
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