Interloop FY25 earnings to plunge 76%

September 09, 2025 (MLN):  Interloop Limited (PSX: ILP) is projected to post an earnings per share (EPS) of Rs2.71 which shows a steep 76% year-on-year decline.

The drop in profitability is mainly attributed to elevated fixed costs following the commissioning of the company’s new apparels plant, according to an earnings preview by JS Global.

JS Global reiterated its Buy rating on Interloop, with a target price of Rs87, based on a conservative five-year revenue CAGR estimate of 16% between FY24 and FY29. The current price is around Rs70.62.

Increased salaries, depreciation, and finance charges are likely to weigh significantly on earnings, while higher effective tax rates and PKR appreciation are expected to further dampen profitability.

On a quarterly basis, ILP’s earnings are projected to decline by 58% YoY and 4% QoQ in 4QFY25, driven by weaker exports across all segments amid uncertainty surrounding U.S. tariffs.

Hosiery segment revenues are estimated to fall by 17% YoY, though gross margins are expected to remain steady at 32%, helping overall margins hold around 20% for the quarter.

Looking ahead, JS Global expects ILP’s earnings to recover in FY26, supported by improved utilization levels at the new apparels plant, as well as gradual capacity additions in hosiery and denim.

These factors are anticipated to aid top-line growth and margin expansion.

The brokerage also highlighted favorable trade dynamics for Pakistan following the imposition of a 50% U.S. tariff on Indian textiles, compared to Pakistan’s preferential 19% rate.

This tariff differential, coupled with shifting sourcing trends by global apparel giants such as Walmart, Target, Zara, and Gap, is expected to create incremental opportunities for Pakistani exporters, with ILP well-positioned to benefit.

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