Karachi: Sazgar Engineering Works (SAZEW) reported robust financial results for the fourth quarter of fiscal year 2026, with earnings per share (EPS) reaching Rs144.33, marking a significant increase of 2.5 times year-on-year and 36% quarter-on-quarter, surpassing industry forecasts. The company's fiscal year 2026 profits rose to Rs23.6 billion, up 44% from the previous year, driven by higher-than-anticipated net sales.

According to JS Global, the financial results were buoyed by a surge in net sales, which climbed 2.9 times year-on-year and 62% quarter-on-quarter to Rs76.5 billion in the fourth quarter. This growth was primarily fueled by increased four-wheeler volumes, notably with the commencement of TANK 500 deliveries. Four-wheeler sales reached 6,549 units, a substantial increase from 2,817 units in the same quarter last year and 5,420 units in the preceding quarter.

In contrast, three-wheeler sales experienced a decline, falling 8% year-on-year and 36% quarter-on-quarter to 5,777 units. The company's gross profit margins narrowed to 22.26%, below expectations and down from 25.11% in the fourth quarter of the previous year.

Sazgar Engineering announced an interim cash dividend of Rs20 per share for the fourth quarter, bringing the total fiscal year dividend to Rs70 per share. The payout ratio was slightly lower than anticipated. Distribution expenses surged due to higher net sales, while administrative and other expenses also saw significant increases. Despite these expenses, the company's other income rose, albeit down from the previous quarter.

The effective tax rate remained steady at 39%. JS Global maintains a buy recommendation for Sazgar Engineering, citing its favorable trading outlook with a projected price-to-earnings ratio of 4.9 for FY26 and 4.4 for FY27.