· Interloop Ltd (ILP) is scheduled to announce its financial results for 2QFY26 on February 4, 2026. Interloop Ltd (ILP) reports robust 2QFY26 results with PAT surging 124% YoY to PKR2,580mn, driven by strong sales growth, improved gross margins, and a significant reduction in finance costs. However, PAT declined 7.8% QoQ due to gross margin compression from lower international textile prices and adverse currency movements, which outweighed a sequential sales increase, leading to declines in operating and pre-tax profit.

· We reiterate our Buy recommendation with a Target Price of PKR115 per share, reflecting confidence in the company’s continued execution and growth prospects.

· The new India-EU and U.S.-India trade deals enhance India’s tariff access, but we believe vertically integrated, higher value-added producers like ILP will remain resilient and may even strengthen their position. Pakistan’s continued zero-tariff access to the EU under GSP+ status preserves a key competitive advantage.

Importantly, ILP competes in less commoditised, higher-margin product categories where Indian competition is inherently limited. Therefore, while the deals intensify broad market competition, ILP’s vertical integration, specialised product mix, and established customer relationships are expected to safeguard and potentially expand its export base in both the EU and the U.S.