Indus Motor Company Profits Surge 48% YoY, But Fall Short of Projections

Islamabad: Indus Motor Company (INDU) reported a 48% year-on-year increase in profit for the fiscal year 2025, reaching Rs23 billion (earnings per share of Rs292.74). However, the financial outcomes fell slightly below market forecasts.

For the fourth quarter of FY25, INDU posted a profit of Rs6.4 billion (EPS of Rs81.88), a 14% rise compared to the same period last year but a 2% decrease quarter-on-quarter. The lower-than-anticipated gross margins contributed to the shortfall in earnings.

The automaker declared a final cash dividend of Rs50 per share, bringing the total payout for FY25 to Rs176 per share. Gross margins for 4QFY25 were recorded at 13.3%, down from 14.2% in 4QFY24 and 16.9% in 3QFY25. Analysts attribute this decline to potentially higher sales of Corolla, Yaris, and Cross models compared to Fortuner and Hilux vehicles, as well as the growing popularity of competing Chinese pickup trucks and SUVs. Despite the quarterly decrease, FY25 gross margins improved to 14.5% from 12.7% in FY24.

Net sales saw a significant boost, increasing by 28% year-on-year and 15% quarter-on-quarter to Rs69.6 billion in 4QFY25. This surge was fueled by a 67% YoY and 30% QoQ jump in units sold, reaching 11,775 units in 4QFY25. Other income experienced a 6% YoY decrease but a 42% QoQ rise to Rs3.98 billion in 4QFY25, reaching a total of Rs14.95 billion for FY25, a 9% YoY increase.

The effective tax rate for 4QFY25 stood at 38%, compared to 39% in 3QFY25 and 32% in 4QFY24. The FY25 effective tax rate was 39%, up from 35% in FY24. Customer advances reached a two-and-a-half-year high of Rs34 billion. INDU’s price-to-earnings ratio for FY26E/27F is currently at 6.5/5.9x, with a dividend yield of 9/10%.