Indus Motor Reports Higher-Than-Expected 3QFY26 Earnings with Increased Dividend

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Business

Indus Motor Reports Higher-Than-Expected 3QFY26 Earnings with Increased Dividend

April 27, 2026

Karachi: Indus Motor Company (INDU) has reported a profit of Rs6.7 billion for the third quarter of fiscal year 2026, translating to an earnings per share (EPS) of Rs85.21. This marks an increase of 2% year over year and 12% quarter over quarter, slightly surpassing market expectations due to better-than-anticipated gross margins.

According to JS Global, the company's earnings for the first nine months of FY26 reached Rs19.4 billion, with an EPS of Rs246.8, representing a 17% rise compared to Rs16.6 billion (EPS of Rs210.6) in the same period of the previous year. Indus Motor also declared an interim cash dividend of Rs51 per share, bringing the total dividend for 9MFY26 to Rs148 per share, reflecting a payout ratio of 60%.

In a related development, Indus Motor announced an additional investment of Rs1 billion aimed at enhancing localization, pushing its total investment to Rs5.1 billion. The company plans to complete this new investment by 2027, while the remaining Rs4.1 billion is expected to be finalized by 2026.

Gross margins for 3QFY26 stood at 15.5%, exceeding expectations, though they declined from 16.9% in the same quarter of the previous year. The increase in gross margins from 13.1% in 2QFY26 was attributed to higher sales of Corolla, Yaris, and Cross models, despite a drop in Fortuner and Hilux sales on a year-over-year basis. However, Fortuner and Hilux sales saw a 53% quarter-over-quarter increase, largely due to a discount offer on the petrol variant of the Fortuner.

The company's net sales rose by 20% year over year and 27% quarter over quarter to Rs72.8 billion in 3QFY26. This surge was driven by a 40% year-over-year and 19% quarter-over-quarter increase in units sold, totaling 12,750 units in 3QFY26.

Indus Motor's effective tax rate was 42.2% for 3QFY26, compared to 38.9% in 3QFY25 and 42.8% in 2QFY26. For the nine-month period, the effective tax rate was 41.5%, up from 39.2% in 9MFY25. The company is currently trading at a FY26 estimated price-to-earnings ratio of 5.4x and offers a dividend yield of 11%.