Indus Motor Company Limited (PSX: INDU) has announced its financial results for the first half of FY26, whereby the company posted a Profit After Tax (PAT) of Rs. 12.70 billion (EPS: Rs. 161.60), reflecting a strong 28 percent year-on-year (YoY) growth from Rs. 9.96 billion (EPS: Rs. 126.69) in 1HFY25.
According to Arif Habib Limited, this represents the highest half-yearly profit reported by the company since 2014.
In the second quarter of FY26, INDU reported a PAT of Rs. 5.98 billion, translating into earnings per share (EPS) of Rs. 76.11. This marks a 23 percent YoY increase compared to Rs. 4.87 billion (EPS: Rs. 61.92) recorded in the same period last year.
Net sales during 1HFY26 stood at Rs. 119.20 billion, up 40 percent YoY. In the second quarter alone, net sales rose to Rs. 57.46 billion, reflecting a 36 percent increase compared to Rs. 42.38 billion in the same quarter last year.
Volume growth remained a key driver, with sales up 67 percent YoY to 10,674 units during the quarter. Higher sales of Yaris, Corolla, and Corolla Cross contributed significantly, accounting for 9,094 units, while Fortuner and Hilux added 1,580 units in 2QFY26.
Gross margins for 1HFY26 improved to 15.2 percent from 13.8 percent in 1HFY25. However, quarterly gross margins eased to 13.1 percent in 2QFY26, compared to 14.1 percent in the previous quarter, mainly due to a higher mix of lower-priced variants.
Other income increased by 43 percent YoY to Rs. 5.32 billion in 2QFY26, supported by higher cash and cash equivalent balances.
Finance costs rose to Rs. 82 million in 2QFY26, compared to Rs. 38 million in the same period last year. For 1HFY26, finance costs amounted to Rs. 132 million, up from Rs. 100 million in 1HFY25.
The company recorded an effective tax rate of approximately 39.3 percent in 2QFY26, compared to 40 percent last year. On a cumulative basis, the effective tax rate for 1HFY26 stood at 41.0 percent, higher than 39.4 percent in 1HFY25.
Based on its performance and outlook, AHL maintains a “Buy” recommendation on the stock. Indus Motor Company is currently trading at FY26 and FY27 price-to-earnings multiples of 6.1x and 5.8x, respectively.
The company also announced a cash dividend of Rs. 46 per share for 2QFY26, bringing the cumulative dividend payout for 1HFY26 to Rs. 97 per share.