Indus Motor (INDU) held its 1HFY26 analyst briefing today, during which management discussed financial performance and the future outlook, according to a report by Topline Pakistan Research. The company posted gross margins of 13.1% in 2QFY26, down from 14.1% in 2QFY25 and 17.1% in 1QFY26. As per the management, the decline was primarily driven by discounted sales campaigns, currency impact and a shift in sales mix.
In the used imported cars segment, 25,507 units were imported in 1HFY26, with a downward trend seen in recent months. In FY25, the used cars reached 42,125 units.
Management expects disruptions and delays in the delivery of imported parts due to the ongoing Middle East crisis. Logistical congestion, higher freight costs, and shipping delays are likely to put pressure on supply timelines. However, a broader ripple effect may become visible over the next month, making effective crisis management critical, although some disruptions may remain unavoidable.
The Auto Policy, set to expire on June 30, 2026, currently provides incentives for hybrid vehicles. Management expects the government to rationalise the tax structure for other vehicle categories. Notably, some vehicles are currently subject to a 25% sales tax. The management believes that this rate could be reduced to around 18% to mitigate potential negative impacts and maintain neutrality across the sector.
New models and product changes are in the pipeline; however, due to ongoing uncertainty, no timeline has been set as of yet.
INDU has a dealership network of 58 outlets, including 27 in Punjab, 15 in Sindh, 5 in KPK, 4 in Balochistan, 6 in Islamabad/Rawalpindi, and 1 in Gilgit-Baltistan.
The Company expects gradual growth in local vehicle demand on the back of economic stability, steady financing rates, and controlled inflation, though recent geopolitical tensions in the Gulf regions will pose uncertainty.
The management supports a clear, market-based Auto Policy 2026–31, in line with the IMF program. It also urges the government to relax auto financing limits, adjust taxes and duties (especially on CKD units), and set proper rules for used car imports to ensure fair competition and consumer safety.
To recall, the company posted 1HFY26 profit after tax (PAT) of Rs12.7bn (EPS:161.6) up 28% YoY.
