Karachi: International Steels Limited (ISL) announced a significant increase in its earnings for the second quarter of fiscal year 2026, with earnings per share reaching Rs2.29, marking a 180% rise compared to the same period last year. The company's earnings for the quarter totaled Rs996 million, surpassing market expectations.

According to JS Global, the notable increase in ISL's earnings during the second quarter was primarily driven by a substantial share of profit from its associate, which contributed Rs411 million under the equity method. The company reported gross margins of 10% for the quarter, slightly lower than the previous quarter but an improvement from 8% in the same quarter last year. This year-on-year improvement is attributed to higher CRC-HRC margins, which increased to US$79 per ton from US$55 per ton.

ISL's net revenue for the second quarter rose by 26% year-on-year and by 10% quarter-on-quarter, reaching Rs23.03 billion. The company attributed this increase to a recovery in volumetric sales. For the first half of fiscal year 2026, net sales climbed 38% year-on-year to Rs43.945 billion. Despite a 5% year-on-year decline in international CRC prices, averaging US$528 per ton, the company managed to improve its financial performance.

The finance cost for the second quarter increased by 54% year-on-year and by 27% quarter-on-quarter, amounting to Rs347 million. For the first half of the fiscal year, the finance cost rose by 11% year-on-year to Rs622 million. The effective tax rate for the quarter was 34%, down from 42.3% in the same period last year.

In addition to the earnings report, ISL announced a cash dividend of Rs2.0 per share, which exceeded market expectations. The company is currently trading at a price-to-earnings ratio of 14.2x for FY26E and 8.8x for FY27F.