Lahore: Pak Elektron Limited (PAEL) has announced its financial results for the second quarter of 2026, reporting earnings of Rs1,749 million, equivalent to an earnings per share (EPS) of Rs1.89. This marks a 2% increase year-over-year and a doubling from the previous quarter, surpassing market expectations due to improved gross profit margins and a lower effective tax rate.

According to JS Global, the company's robust performance in the second quarter contributed to a total earnings of Rs2,619 billion (EPS of Rs2.84) for the first half of 2026, reflecting an 11% increase compared to the same period last year. The gross profit margins for 2Q2026 stood at 24.92%, up from 24.58% in the first quarter of 2026 but down from 27.74% in the second quarter of 2025. The marginal increase was attributed to seasonal demand, which boosted net sales and improved gross margins, despite ongoing geopolitical tensions affecting shipments and rising competition in the appliance sector.

The effective tax rate (ETR) for the second quarter of 2026 was recorded at 31.91%, a significant reduction from 42.86% in the first quarter of 2026 and 42.21% in the same quarter of the previous year. This lower-than-anticipated tax rate played a crucial role in the higher earnings reported by the company.

Pak Elektron's net sales reached an all-time quarterly high of Rs22 billion, representing a 5% year-over-year and 9% quarter-over-quarter increase. The growth was largely driven by record gross revenue of Rs29.9 billion, with the appliances division accounting for 76% of the total gross revenue.

In terms of expenses, distribution costs rose by 13% year-over-year but decreased by 17% quarter-over-quarter to Rs1,429 million. Administrative expenses saw a 9% year-over-year increase while declining by 15% from the previous quarter to Rs740 million.

The company is currently trading at a projected price-to-earnings ratio of 8.7 for 2026 and 6.6 for 2027, indicating investor confidence in its financial outlook.