Lahore: Millat Tractors Limited (MTL) has reported a 25% year-over-year increase in earnings per share (EPS) for the fiscal year 2026, reaching Rs19.97, according to a press release by JS Global. Despite the increase in profitability, the company announced a dividend per share (DPS) of Rs21, which fell short of market expectations.

The company's consolidated profit after tax (PAT) for FY26 was recorded at Rs7.95 billion, with a fourth-quarter PAT of Rs2 billion. This reflects a 42% year-over-year increase but a 37% quarter-over-quarter decrease. The results were influenced by lower-than-expected gross margins and a higher-than-anticipated effective tax rate (ETR).

MTL's gross margins declined to 26.7% in the fourth quarter of FY26, compared to 38% in the previous quarter, largely due to a shift in sales mix toward lower-horsepower tractors. This shift contributed to the overall FY26 gross margins of 33%, up from 27% in FY25. The company's net sales also saw a 20% year-over-year increase, reaching Rs64 billion, bolstered by a significant rise in tractor sales.

The effective tax rate for the fourth quarter stood at 44%, contributing to an overall FY26 ETR of 45%, a substantial increase from 22% in FY25. Despite these challenges, Millat Tractors maintains a positive outlook, with JS Global reiterating a "BUY" stance on the company's stock.