Karachi: Indus Motor Company (INDU) announced its financial results for the second quarter of fiscal year 2026, reporting a profit of Rs5.98 billion with earnings per share (EPS) of Rs76.11, reflecting a 23% year-on-year increase. However, the quarterly earnings saw an 11% decline compared to the previous quarter, in line with industry expectations.
According to JS Global, the company's half-year earnings for FY26 rose to Rs12.7 billion (EPS of Rs161.60), marking a 28% increase from the Rs9.96 billion (EPS of Rs126.68) recorded in the first half of FY25. Indus Motor Company also declared an interim cash dividend of Rs46 per share, bringing the total dividend for the first half of FY26 to Rs97 per share, with a payout ratio of 60%.
The company's gross margins for 2QFY26 stood at 13.1%, a decline from 14.1% in the same quarter of the previous year and 13.4% in the first quarter of FY26. This reduction is attributed to higher sales of Corolla, Yaris, and Cross variants compared to Fortuner and Hilux models, whose sales dropped by 30% quarter-on-quarter, possibly due to increased competition from newly launched Chinese pickups and SUVs.
For the first half of FY26, gross margins improved to 15.2%, up from 13.8% in the corresponding period last year. The company's net sales increased by 33% year-on-year to Rs57.5 billion in 2QFY26, although they declined by 7% quarter-on-quarter. The year-on-year sales growth was driven by a 67% increase in units sold, reaching 10,674 units compared to 6,381 units in 2QFY25.
Other income rose by 43% year-on-year and 83% quarter-on-quarter to Rs5.3 billion in 2QFY26. Cash and cash equivalents remained stable at Rs100 billion by the end of December 2025. The effective tax rate increased to 43% for 2QFY26, compared to 40% in the same quarter last year and 38% in the previous quarter. For the first half of FY26, the effective tax rate was 41%, up from 39% in 1HFY25.
Indus Motor Company is trading at a forward price-to-earnings ratio of 5.7 for FY26 and 5.2 for FY27, with a dividend yield forecasted at 10% and 11%, respectively.
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