Indus Motor Company Limited (INDU) announced its 1QFY26 results earlier today, where the company posted PAT of PkR6.7bn (EPS: PkR85.5) vs. PkR5.1bn (EPS: PkR64.8) in SPLY, up 32%YoY primarily due to an increase in volumetric sales, along with improved margins. The result was above our expectations due to higher-than-anticipated gross margins. Additionally, the company announced an interim cash dividend of PkR51.0/sh, according to a report by AKD Research:

·        Company’s revenue clocked in at PkR61.7bn vs. PkR41.6bn in 1QFY25, up 48%YoY. The surge was primarily driven by a 61% YoY increase in sales volumes, totaling 9,889 units compared to 6,160 units in SPLY, with the rise attributed to Yaris sales amid the facelift launch and elevated IMV sales.

·        Gross margins for the quarter clocked in at 17.1% compared to 13.4% in SPLY. We believe, the said incline in margins is attributable to i) higher sales, ii) 3.4%YoY decline in CRC/HRC prices and iii) appreciation of PkR.

·        Operating expenses increased by 24%YoY, largely attributable to higher volumetric sales during the period.

·        Other income witnessed a decrease of 35%YoY, clocking in at PkR2.9bn vs PkR4.5bn in SPLY, due to decline in interest rates.

https://research.akdsl.com/638972450974224061.pdf

AKD Research