Karachi: International Steels Limited (ISL) reported a significant rise in its quarterly earnings, with earnings per share reaching Rs2.91 for the fourth quarter of fiscal year 2026, reflecting a 108% increase compared to the same period last year. The company's revenue also showed a notable increase, driven by improved gross margins and higher sales volumes.
According to JS Global, ISL's earnings for the fourth quarter amounted to Rs1,265 million, representing a 59% increase from the previous quarter. For the entire fiscal year 2026, the company's earnings totaled Rs3,673 million, marking a 136% year-over-year growth. The rise in earnings surpassed expectations, attributed largely to higher-than-estimated gross margins and net sales.
The company reported an improvement in gross margins to 13.5% in the fourth quarter of fiscal year 2026, compared to 10.7% in the same quarter of the previous year. This improvement was primarily driven by an increase in volumetric sales, which offset the impact of lower hot-rolled coil to cold-rolled coil margins. Additionally, inventory gains contributed to the quarter-over-quarter improvement in margins as cold-rolled coil prices rose by 5%.
Net revenue for the fourth quarter climbed by 57% year-over-year and 12% quarter-over-quarter, reaching Rs26.07 billion. For the full fiscal year, net sales amounted to Rs93.3 billion, marking a 50% increase from the previous year. International cold-rolled coil prices averaged US$553 per ton during the fourth quarter, showing a 5% increase compared to the previous year.
Finance costs for the fourth quarter rose by 61% year-over-year but saw a 32% decline from the previous quarter, totaling Rs240 million. The annual finance cost increased by 51% to Rs1,214 million. The effective tax rate for the fourth quarter was lower than expected at 30.0%, compared to 35.1% in the same quarter of the previous year.
In addition to the financial results, ISL announced a cash dividend of Rs3.0 per share, which was in line with market expectations. The company is currently trading at a fiscal year 2026 price-to-earnings ratio of 10.9x, with a dividend yield of 5%.