Karachi: Indus Motor Company (INDU) reported a notable financial performance for the first quarter of fiscal year 2027, with earnings per share reaching Rs93.95, marking a 10% year-over-year increase and a 21% rise from the previous quarter. This performance surpassed industry expectations.

According to JS Global, the company's gross margins improved to 15.3% in the first quarter, exceeding the anticipated 13%, though slightly lower than the 17.1% recorded in the same period last year. The quarter-on-quarter improvement was attributed to increased sales and reduced discounts. Net sales saw a 20% year-over-year increase and an 11% quarterly rise, totaling Rs74.02 billion, primarily driven by higher unit sales. Indus Motor sold 13,260 units in the quarter, reflecting a 34% increase from the previous year and a 17% rise from the prior quarter.

Other income for the quarter increased by 11% year-over-year but experienced a 34% decline from the previous quarter, amounting to Rs3.2 billion. The decline was primarily due to the absence of SIDC income. Cash and cash equivalents fell to Rs93 billion as of September 2026, down from Rs99 billion in June 2026, while customer advances decreased to Rs10.5 billion from Rs30 billion over the same period.

Administrative expenses increased by 5% year-over-year to Rs898 million, though they decreased by 37% from the previous quarter. Distribution expenses rose by 4% year-over-year to Rs723 million. However, finance costs surged by 310% year-over-year and 9% quarter-on-quarter, reaching Rs204 million.

The effective tax rate for the quarter was 37.6%, slightly lower than the 39.3% recorded in the first quarter of the previous fiscal year. Additionally, Indus Motor announced an interim cash dividend of Rs56 per share, with a payout ratio of 60%.

Indus Motor is currently trading at an estimated price-to-earnings ratio of 4.8 times for fiscal year 2027, with a dividend yield of 13%.