Indus Motor profit rises 28%, Rs46 dividend declared

February 20, 2026 (MLN): Indus Motor Company Limited (PSX:INDU) reported a net profit of Rs12.70bn for the half year ended December 31, 2025, which represents a 28% increase from the Rs9.96bn profit recorded in the same period last year.

The company's earnings per share rose to Rs161.6 from Rs126.69 in the corresponding period of the previous year while dividend was declared at Rs46 per share.

The automotive assembler's revenue from contracts with customers increased 40% year-on-year to Rs119.20bn from Rs84.88bn, demonstrated by a notable increase in sales of Completely Knocked Down (CKD) and Completely Built-up (CBU) vehicles during the six-month period ended December 31, 2025, rising by 63% to 20,754 units, compared to 12,749 units in the corresponding period of the previous year.

This growth in sales is primarily driven by strong customer preference for sedans, particularly the high-demand Toyota Corolla and Toyota Yaris.

The sustained demand for these models is supported by their reputation as preferred sedans and the successful introduction of minor model enhancements that have further strengthened their appeal to customers.

Cost of sales rose 38% to Rs101.11bn from Rs73.19bn, resulting in a gross profit of Rs18.09bn, up 55% from Rs11.69bn in the prior period.

The gross profit margin improved to 15.2% from 13.8% in H1 FY2025, indicating enhanced operational efficiency and better pricing power.

The net profit margin stood at 10.7% compared to 11.7% in the same period last year, a slight decline despite strong revenue growth.

Distribution expenses increased 35% to Rs1.20bn from Rs890.4m, while administrative expenses rose 31% to Rs1.93bn from Rs1.47bn, reflecting the costs associated with expanded operations.

Other operating expenses increased 18% to Rs183.1m from Rs154.5m. Workers' profit participation and welfare fund surged 60% to Rs1.32bn from Rs826.4m, reflecting the company's strong profitability and profit-sharing arrangements.

Profit from operations grew 61% to Rs13.45bn from Rs8.35bn in H1 FY2025, demonstrating exceptional operational leverage.

Other income remained virtually flat at Rs8.22bn compared to Rs8.18bn, while profit before finance costs reached Rs21.67bn, up 31% from Rs16.53bn.

Finance costs increased 32% to Rs131.6m from Rs99.5m, reflecting higher working capital requirements to support the expanded business volumes.

Profit before taxation reached Rs21.53bn, representing a 31% increase from Rs16.39bn in the corresponding period last year.

The company recorded a taxation expense of Rs8.83bn, up 37% from Rs6.43bn, with the higher tax burden moderating the net profit growth to 28%.

The improvement in profitability is primarily driven by higher CKD voluses, lower input material costs due to favorable exchange rates, cost optimization initiatives, and increased localization efforts.

The company's market share in the overall automotive sector stood at approximately 16%.

INDU expects continued growth in demand for locally manufactured vehicles, supported by improving macroeconomic conditions, stable financing costs, and contained inflation.

The automobile sector continues to actively advocate policy measures that support the development of local vehicle assemblers and parts manufacturers.

According to the company, the government is in the process of formulating the Auto Industry Policy 2026-31, which will replace the existing policy set to expire in June 2026.

The forthcoming policy is expected to be aligned with the National Tariff Policy under Pakistan's IMF Extended Fund Facility, reflecting a shift toward a more structured and market-driven framework.

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