Indus Motor Company Posts Higher Profits, Driven By Sales Surge

Islamabad: Indus Motor Company Limited (INDU) reported a 14% year-on-year increase in profit after tax (PAT) to PkR6.5 billion (earnings per share: PkR82.1) in the fourth quarter of fiscal year 2025, compared to PkR5.7 billion (EPS: PkR72.1) in the same period last year. The growth was primarily fueled by a significant rise in sales volume. However, the profit figures fell short of analyst expectations due to lower-than-projected gross margins. The automaker also declared a final cash dividend of PkR50.0 per share, bringing the total payout for the fiscal year to PkR176 per share.

The company’s revenue for the quarter reached PkR69.6 billion, a 28% YoY jump from PkR54.2 billion in the same quarter of the previous fiscal year. This increase was mainly attributed to a 67% YoY surge in sales volume, with 11,775 units sold compared to 7,069 units in the same period last year. The growth in sales volume was driven by increased demand for the Yaris following its facelift launch and higher sales of IMVs (Innovative International Multi-purpose Vehicles).

Despite higher revenue, gross margins contracted to 13.3% compared to 14.2% in the same period last year. This decline is likely due to a shift in sales mix towards the Yaris from the Corolla Cross, coupled with promotional discounts on Corolla Cross models, which saw prices fall 3% YoY. Operating costs decreased by 29% YoY, thanks to lower warranty claims and reduced marketing spend. Other income saw a 6% YoY dip to PkR4.0 billion from PkR4.2 billion, primarily due to lower interest rates.

For the full fiscal year 2025, INDU posted earnings of PkR23 billion (EPS: PkR292.7), a significant 53% YoY increase from PkR15 billion (EPS: PkR191.8) in FY24. AKD Securities maintains a buy rating on the stock with a June 2026 target price of PkR3,585 per share. The positive outlook is based on several factors, including high localization mitigating potential currency devaluation risks, a first-mover advantage in the hybrid electric vehicle (HEV) segment, and a wide-reaching dealership network across the country.