Islamabad: Interloop Ltd. (ILP) achieved its highest-ever quarterly revenue of PkR48.0bn (US$170mn) in 4QFY25, an 11% year-on-year surge attributed to increased export volumes, particularly in denim and apparel. Profitability also saw a modest 2% yearly rise, reaching PkR2.7bn (EPS: PkR1.90) compared to PkR2.6bn (EPS: PkR1.87) in the same period last year, driven by export growth and reduced finance costs. The company also declared a final cash dividend of PkR1.0/sh.

Gross margins dipped marginally to 22.0% from 22.4% a year earlier due to factors including lower product pricing, higher salaries following minimum wage increases, and elevated costs associated with a new apparel product line. However, a 2 percentage point quarter-on-quarter improvement was noted thanks to declining cotton prices and improved apparel segment utilization.

Operating expenditures saw an 11% yearly jump to PkR4.2bn, driven by rising distribution costs linked to amplified export volumes. Finance costs decreased by 28% year-on-year to PkR2.0bn, owing to declining interest rates, offsetting increased borrowings. The effective tax rate rose to 38% from 15% in the same period last year, due to a transition from the Final Tax Regime to the Normal Tax Regime.

Despite the positive quarterly performance, full-year FY25 profitability contracted by 66% to PkR5.4bn (EPS: PkR3.84) compared to PkR15.8bn (EPS: PkR11.25) in the preceding fiscal year, largely due to compressed gross margins and a higher tax burden. AKD Securities maintains a ‘BUY’ rating on ILP with a December 2025 target price of PkR104/sh, citing the company’s growth potential based on its competitive product range and expansions in hosiery, denim, and apparel segments. Furthermore, reduced competitive tariffs from the U.S. are expected to provide added growth opportunities.