Indus Motor Company Limited (INDU), the assembler of Toyota vehicles in Pakistan, has reported a 10 per cent year-on-year increase in net profit to Rs7.38 billion for the first quarter of the financial year 2026-27, supported by a significant recovery in vehicle sales, improved quarterly margins and stronger revenue generation.
According to a financial results review issued by Topline Securities on Wednesday, the company’s earnings per share (EPS) increased to Rs93.95 during July-September 2026, compared with Rs85.49 in the corresponding quarter of the previous financial year.
The company’s financial performance exceeded industry expectations, with quarterly profit also registering a 21 per cent increase compared with Rs6.11 billion recorded during the April-June 2026 quarter.
The improved profitability was accompanied by a substantial increase in vehicle deliveries, reflecting stronger sales momentum for one of Pakistan’s leading automobile manufacturers.
Vehicle Sales Jump 34% As Revenue Crosses Rs74 Billion
Indus Motor recorded net sales of Rs74.02 billion during the quarter under review, representing a 20 per cent increase from Rs61.74 billion in the corresponding period last year.
On a quarter-on-quarter basis, revenue increased by 11 per cent from Rs66.78 billion recorded in the preceding quarter.
The growth was primarily driven by higher vehicle sales, with the company selling 13,260 units during July-September 2026, compared with 9,889 units in the same period last year.
This represented an impressive 34 per cent year-on-year increase in sales volumes.
Compared with the preceding quarter, when Indus Motor sold 11,333 vehicles, sales increased by 17 per cent.
The increase in vehicle deliveries highlights the company’s improving sales momentum, although the financial results alone do not establish whether the recovery reflects a broader industry-wide trend.
Gross Profit Climbs To Rs11.3 Billion
The company’s gross profit increased by 7 per cent year-on-year to Rs11.31 billion, compared with Rs10.54 billion in the corresponding quarter of FY26.
More significantly, gross profit surged by 64 per cent on a quarter-on-quarter basis from Rs6.89 billion.
Indus Motor’s gross profit margin stood at 15.3 per cent during the quarter, exceeding Topline Securities’ expectations of approximately 13 per cent.
Although the margin remained below the 17.1 per cent recorded in the corresponding quarter last year, it improved substantially from 10.3 per cent in the preceding quarter.
According to Topline Research, the sequential improvement was attributable to higher sales volumes and lower discounts, which had previously weighed on the company’s profitability.
The results indicate that improved sales activity and pricing conditions contributed to stronger operational performance during the quarter.
Company Announces Rs56 Per Share Dividend
In another development for shareholders, Indus Motor announced an interim cash dividend of Rs56 per share for the first quarter of FY27.
The dividend represents an increase from Rs51 per share distributed during the corresponding quarter last year and Rs47 per share in the preceding quarter.
According to Topline Securities, the announced dividend translates into a payout ratio of approximately 60 per cent.
The dividend announcement reflects the company’s continued distribution of earnings to shareholders alongside its quarterly profitability.
Other Income Reaches Rs3.2 Billion
Indus Motor’s other income increased by 11 per cent year-on-year to Rs3.22 billion, compared with Rs2.90 billion in the corresponding quarter of FY26.
However, other income declined by 34 per cent compared with Rs4.85 billion recorded during the preceding quarter.
Topline Securities attributed the sequential decline primarily to the absence of Special Incentive Duty Credit (SIDC) income during the quarter.
Meanwhile, the company’s cash and cash equivalents stood at Rs93 billion at the end of September 2026, compared with Rs99 billion at the end of June 2026.
Customer advances also declined to Rs10.5 billion from Rs30 billion during the same period.
Despite these movements, the company maintained a substantial cash position at the end of the reporting quarter.
Operating Expenses And Finance Costs
Indus Motor’s administrative expenses increased by 5 per cent year-on-year to Rs898 million, compared with Rs855 million in the corresponding quarter last year.
However, administrative expenses declined by 37 per cent compared with Rs1.43 billion in the preceding quarter.
Distribution expenses stood at Rs723 million, representing a 4 per cent year-on-year increase.
The company’s finance costs increased sharply to Rs204 million, compared with Rs50 million in the corresponding quarter last year, reflecting a 310 per cent increase.
On a sequential basis, finance costs rose by 9 per cent from Rs186 million.
Despite higher finance costs, the company’s profit before taxation increased by 7 per cent year-on-year to Rs11.84 billion.
Taxation And Earnings Performance
Indus Motor recorded a taxation expense of Rs4.45 billion during the quarter, compared with Rs4.35 billion in the corresponding period last year.
The company’s effective tax rate stood at 37.6 per cent, compared with 39.3 per cent in the corresponding quarter of FY26 and 37 per cent in the preceding quarter.
After accounting for taxation, net profit reached Rs7.38 billion, compared with Rs6.72 billion a year earlier.
The combination of higher vehicle sales, improved sequential gross margins and increased revenue enabled the company to deliver earnings above market expectations.
Stock Valuation And Investor Outlook
According to Topline Securities, Indus Motor was trading at an estimated FY27 price-to-earnings multiple of 4.8 times, with an indicated dividend yield of approximately 13 per cent at the time of the report.
These valuation indicators provide investors with a perspective on the company’s earnings and dividend profile.
The company’s latest financial performance demonstrates improved quarterly operating momentum, particularly in vehicle sales and gross profitability.
While the year-on-year decline in gross margins and reduction in customer advances remain important financial indicators, the sharp increase in vehicle volumes and improvement in sequential earnings suggest a stronger start to FY27.
With quarterly revenue exceeding Rs74 billion, profit reaching Rs7.4 billion and vehicle deliveries rising by more than one-third, Indus Motor has opened the new financial year with encouraging results, reinforcing its position as a major player in Pakistan’s automobile manufacturing sector.