Karachi: Indus Motor Company Ltd. (INDU) reported its financial results for the first quarter of fiscal year 2027, revealing a notable increase in net profit attributable to higher-than-expected gross margins. The company announced a net profit after tax (NPAT) of PkR7.4 billion, translating to earnings per share (EPS) of PkR94.0, up 10 percent from PkR6.7 billion (EPS: PkR85.5) during the same period last year. An interim cash dividend of PkR56.0 per share was also declared, which surpassed market expectations.

According to AKD Securities Limited, Indus Motor's revenue climbed by 20 percent year-over-year to PkR74.0 billion from PkR61.7 billion in the same period last year, driven by a 34 percent increase in sales volumes, totaling 13,260 units compared to 9,889 units previously. Despite this, the company's gross margins decreased to 15.3 percent from 17.1 percent in the same period last year, attributed to changes in the sales mix, increased international cold rolled coil (CRC) prices, and higher freight and dealer commission costs.

The analysis further maintains a 'BUY' recommendation for Indus Motor, setting a target price of PkR3,966 per share by December 2026. The recommendation is based on anticipated volume-led growth amid economic recovery, robust brand equity, an extensive dealership network, and improved margins supported by higher localization and favorable working capital management.