Karachi: AGP Limited has reported a decrease in its earnings for the second quarter of 2026, with earnings per share (EPS) at Rs2.15, marking a 3% decline year-over-year. The company's earnings also fell short of expectations, with quarterly profits amounting to Rs601 million and a 30% decrease quarter-over-quarter.

According to JS Global, the lower-than-expected earnings were attributed to a decline in net sales, which dropped 16% year-over-year to Rs4.6 billion for the quarter, influenced by a reduction in seasonal demand and a halt in exports to Afghanistan. The company's sales for the first half of 2026 totaled Rs11.5 billion, down 9% from the previous year. Despite the revenue dip, AGP reported an increase in gross margins to 61.2% in the second quarter from 58.6% a year earlier.

The company's distribution costs fell by 3% year-over-year to Rs1.6 billion for the quarter, while finance costs decreased 6% year-over-year to Rs344 million. However, finance costs increased by 9% compared to the previous quarter. The effective tax rate (ETR) for the quarter was recorded at 10.0%, a significant drop from 30.2% in the same quarter last year, attributed to a lower performance of OBS-AGP, which led to a reduced turnover tax regime.

In addition to these financial results, AGP Limited declared a cash dividend of Rs2.0 per share for the second quarter. Despite the lower-than-expected earnings, JS Global maintains a Buy recommendation on AGP's stock, which is currently trading at a price-to-earnings ratio of 12.6x for 2026E and 10.9x for 2027F.