Auto assemblers accelerate profit growth in FY26

September 21, 2026 (MLN): Pakistan's automobile assembling sector posted a strong bottom-line performance in FY26, as robust volumetric and price-driven revenue growth across the industry offset a sharp rise in the tax burden.

The combined net profit of the five KSE-100 listed automobile assemblers surged 27.80% YoY to Rs67.34bn, as against Rs52.69bn in FY25.

As per the results compiled by Mettis Global of the income statements of the five listed automobile assembling companies, the sector saw a 38.28% YoY jump in net sales/revenue, worth Rs603.72bn as compared to Rs436.57bn in SPLY.

To note, the compiled sector result includes MTL, GAL, GHNI, SAZEW, and INDU.

Cost of sales climbed 38.61% YoY to Rs480.80bn, marginally outpacing the topline growth, though gross profit still expanded 37.02% YoY to Rs122.92bn from Rs89.71bn in SPLY.

On the cost front, combined distribution, administrative and other operating expenses rose 23.72% YoY to Rs25.63bn, a slower pace than revenue growth, easing some of the pressure on margins.

Other income across the sector grew 16.64% YoY to Rs21.37bn as against Rs18.32bn in SPLY, lending further support to operating earnings.

Taken together, the sector's operating profit advanced 35.90% YoY to Rs118.65bn from Rs87.30bn in SPLY, as the moderate rise in expenses and healthy other income offset the slightly faster growth in cost of sales.

Below the operating line, combined finance costs eased 16.86% YoY to Rs2.41bn from Rs2.90bn in SPLY, providing additional relief to the bottom line amid a softer interest rate environment.

Other charges comprising levies, final taxes and Workers' Profit Participation/Welfare Fund contributions — rose 38.23% YoY to Rs3.24bn from Rs2.34bn in SPLY.

On account of the strong operating performance and lower finance costs, profit before taxation climbed 37.70% YoY to Rs112.99bn as compared to Rs82.06bn in the corresponding period.

However, the sector's taxation charge rose sharply by 55.44% YoY to Rs45.65bn as against Rs29.37bn in SPLY, tempering the pace of bottom-line growth.

Despite the steep rise in the tax outgo, the combined net profit of the five listed automobile assemblers still climbed 27.80% YoY to Rs67.34bn in FY26.

Statement of Profit or Loss (Combined) for the Year Ended June 30, 2026 (Rs '000)

Source: Company accounts, Mettis Global

Outlook

Sazgar Engineering Works Limited (PSX: SAZEW) said the economy is expected to continue its gradual recovery during FY2026-27, supported by sustained macroeconomic stabilization, fiscal reforms and improving investor confidence.

The company added that the auto sector is expected to remain highly competitive with the entry of new manufacturers and a growing shift toward New Energy Vehicles (NEVs).

Against this backdrop, the company’s key priorities include expansion of its four-wheeler NEV portfolio, enhanced localization, improved production efficiency and disciplined cost management.

Ghandhara Industries Limited (PSX: GHNI) said the overall economic and business environment showed signs of improvement during FY2026, supported by greater macroeconomic stability and easing financing conditions.

The company added that business and consumer confidence also witnessed a gradual recovery during the year.

For FY2027, management remains focused on sustaining sales momentum, enhancing revenue and improving market penetration to further strengthen the company’s market leadership.

Indus Motor Company Limited (PSX: INDU) said the timely announcement of the new automotive policy will be important in providing a stable, transparent and predictable framework for the industry.

The company said the policy should support localization, technological advancement, industrial competitiveness and long-term investment.

Indus Motor added that it remains focused on strengthening its market position through operational excellence, product innovation and customer-centric strategies.

Automobile Assembler vs. KSE100 Performance

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