Indus Motor Company Limited (PSX: INDU), which assembles and sells Toyota vehicles in Pakistan, announced its results for the three months to 30 September 2026 after a board meeting on 27 October 2026; the filing reached the Pakistan Stock Exchange on 28 October. This is the first quarter of its 2027 financial year, which runs to June 2027.
The headline: a profit after tax of Rs 7.38 bn, or Rs 93.95 a share, up 9.9% from Rs 6.72 bn (Rs 85.49) a year earlier, on 13,380 vehicles sold, up 34%. The board declared a first interim cash dividend of Rs 56 a share (560%), against Rs 51 a year earlier.
The quarter in numbers
| Rs M | Jul to Sep 2026 | Jul to Sep 2025 | Change |
|---|---|---|---|
| Revenue | 74,015 | 61,738 | +19.9% |
| Cost of sales | (62,702) | (51,197) | +22.5% |
| Gross profit | 11,313 | 10,541 | +7.3% |
| Gross margin | 15.3% | 17.1% | down 1.8 points |
| Distribution, admin and other operating expenses | (1,729) | (1,633) | +5.9% |
| Workers’ profit participation and welfare funds | (763) | (688) | +11.0% |
| Profit from operations | 8,821 | 8,221 | +7.3% |
| Other income | 3,221 | 2,900 | +11.1% |
| Finance cost | (204) | (50) | about 4 times |
| Profit before tax | 11,837 | 11,070 | +6.9% |
| Tax (effective rate 37.6% against 39.3%) | (4,453) | (4,350) | +2.4% |
| Profit after tax | 7,384 | 6,719 | +9.9% |
| Earnings per share, Rs | 93.95 | 85.49 | +9.9% |
| Interim dividend per share, Rs | 56.00 | 51.00 | +9.8% |
What drove the result
Many more cars sold. Sales of locally assembled and imported vehicles rose 34% to 13,380 units from 9,976, and production rose 39% to 14,240 units. The company points to steady demand for the Corolla and Yaris and the Fortuner SUV, and says it kept a market share of about 17%. The wider industry grew more slowly: industry sales of cars and light commercial vehicles rose about 19% to roughly 50,480 units, according to the figures quoted in the directors’ report.
Less revenue per car. Revenue rose 20%, much less than the 34% rise in units. By our calculation, revenue per vehicle fell from about Rs 6.19 M to about Rs 5.53 M, roughly 11% lower. The filing does not explain this, but a bigger share of cheaper models in the mix would produce exactly this pattern.
Thinner margins. Cost of sales grew faster than revenue (22.5% against 19.9%), so the gross margin fell from 17.1% to 15.3%. Running costs stayed under control, rising only 6% while revenue rose 20%, which the company credits to cost control, more local sourcing of parts and a steadier rupee.
Cash still earns money. Other income, mostly the return on Indus Motor’s large cash and investment balances, rose 11% to Rs 3.22 bn. That is more than a quarter of gross profit, and a big reason profit grew close to 10% despite the lower margin. A slightly lower effective tax rate (37.6% against 39.3%) also helped.
Finance cost is small but rising. It went up from about Rs 50 M to about Rs 204 M. Against a Rs 7.38 bn profit this does not matter much yet. Debt is tiny: the long-term loan is about Rs 150 M in total.
The balance sheet
- A large cash pile, but smaller than in June. Short-term investments and cash came to Rs 92.5 bn at 30 September, down from Rs 114.2 bn at the end of June. That is about Rs 1,177 a share, close to two thirds of the share price.
- Customer advances fell sharply. Advances from customers and dealers dropped from Rs 30.3 bn to Rs 10.5 bn as booked cars were delivered. This is the main reason the cash pile shrank, and it means fewer prepaid orders are waiting to be delivered.
- More stock. Inventory rose from Rs 36.8 bn to Rs 42.9 bn, in line with production running ahead of sales.
- Equity rose to Rs 90.6 bn, about Rs 1,152 a share.
The dividend
The Rs 56 first interim dividend compares with Rs 51 at the same stage last year. For the full 2026 financial year the company paid Rs 195 a share in four instalments, up from Rs 176 the year before, and the dividends declared over the last 12 months add up to Rs 200 a share. Shareholders on the register at the close of 5 November 2026 receive it, and the share register is closed from 6 to 10 November. With next-day settlement, that means buying by about 4 November.
What management says about the outlook
The directors expect a steady rise in demand for locally made vehicles through the rest of the financial year, helped by a more stable economy, steady financing costs (the policy rate is 11.5%) and controlled inflation. They flag three risks:
- Oil and the rupee. Middle East tensions are pushing up oil prices, which raises costs, strains foreign exchange reserves and could weaken the rupee and push up interest rates.
- Used car imports. Imports of used cars jumped to 5,897 units in the quarter, from 1,132 in the previous quarter. The company says the gift scheme for overseas Pakistanis is being misused to import cars for resale, and is asking for stricter enforcement.
- Capacity. The industry still runs at only about 45% of its installed capacity. The company is asking the government to relax the Rs 3 M limit on auto financing and to rationalise taxes on vehicles.
Valuation snapshot
At the 28 October close of Rs 1,824.29, up 1.9% on the day of the result:
| Measure | Value |
|---|---|
| Earnings per share, last 12 months (October 2025 to September 2026) | about Rs 333 |
| Price to earnings | about 5.5 times |
| Price to book | about 1.6 times |
| Dividends declared, last 12 months | Rs 200 a share, a yield of about 11% |
| Cash and short-term investments per share | about Rs 1,177 |
| Market value (78.6 million shares) | about Rs 143 bn |
| Share price, last 52 weeks | low Rs 1,695, high Rs 2,250 |
The stock trades about 19% below its 52-week high. Excluding its cash and investments, the market is valuing the car business at only about Rs 51 bn, less than two years of current profit. That cheapness reflects how cyclical car demand is in Pakistan: sales depend on interest rates, auto financing, prices and import policy, and new brands, including Chinese hybrid and electric models, add competition.
What to watch next
- Monthly car sales. Industry figures each month are the earliest sign of whether the volume growth continues.
- Gross margin and revenue per car. The fall in margin to 15.3% and in revenue per vehicle are the weak spots in this result.
- Customer advances. Fewer prepaid orders could mean slower deliveries ahead, or simply that waiting times are now short.
- Used car imports and policy. Any change to import schemes, auto financing limits or vehicle taxes would move demand directly.
The bottom line
Indus Motor had a strong start to its financial year: 34% more vehicles sold, 10% more profit, a higher interim dividend and the best quarter of the last five. The weak spots are a margin that fell almost 2 points and lower revenue per car. With the shares at about 5.5 times earnings, a yield near 11% and almost two thirds of the share price backed by cash and investments, the market is pricing in a slowdown that has not yet appeared in the numbers.
You can follow INDU’s price, Pulse Score, dividend history, results calendar and off-market trades in the Market Pulse Hub dashboard under PSX.
Bilal, Market Pulse Hub
Source: Indus Motor Company Limited, unaudited condensed interim financial statements and directors’ report for the quarter ended 30 September 2026, filed with the Pakistan Stock Exchange. Earlier quarters and dividends from company filings and PSX payout announcements. Prices from the PSX data portal. Per-share, per-vehicle, twelve-month and valuation figures are our calculations. This article is for education and information only and is not investment advice.