KARACHI: Indus Motor Company Limited posted a profit after tax of Rs25.5 billion in fiscal year 2025-26.

The company recorded an 11 percent increase from Rs23 billion in the previous year.

The results were filed with the Pakistan Stock Exchange (PSX). Indus Motor Company manufactures and sells Toyota vehicles in Pakistan.

The company also announced an interim cash dividend of Rs47 per share. Its total dividend for FY26 reached Rs195 per share.

The overall payout ratio stood at 60 percent during the financial year.

Despite annual growth, fourth-quarter earnings declined. Profit fell five percent year-on-year to Rs6.1 billion.

The company attributed the quarterly decline mainly to weaker gross margins.

Net sales increased 20 percent during FY26 to Rs258.8 billion. Total vehicle volumes also showed strong growth during the year.

The company reported vehicle volumes of 44,646 units, marking a 34 percent annual increase.

However, fourth-quarter sales declined four percent year-on-year. Sales also fell eight percent compared with the previous quarter.

Fourth-quarter sales stood at Rs66.8 billion. Vehicle volumes during the quarter reached 11,333 units.

Indus Motor’s annual gross profit increased 16 percent to Rs36.3 billion. However, quarterly gross margins remained under pressure.

The gross profit margin stood at 14 percent in the fourth quarter. It was 15.5 percent in the previous quarter.

The margin was 13.3 percent during the same quarter last year. Annual profit before tax increased 14 percent to Rs42.8 billion.

The company said it sold 45,035 units during FY26. This represented 33 percent growth compared with the previous year.

It attributed the stronger performance to recovering market demand and strong brand performance. Cost control and higher localization also supported profitability.

Favorable exchange rate movements further helped the company during the year.

Indus Motor Chairman Mohamed Ali R. Habib described FY26 as a period of economic stabilization. He also noted a gradual recovery in Pakistan.

He stressed the need for a stable and predictable policy environment. Such conditions are important for localization and technology transfer.

He also highlighted innovation and sustainable industrial investment as key priorities.

CEO Ali Asghar Jamali said stronger sales reflected improving market demand. He also pointed to the continued strength of the company’s brands.

He said the company would focus on operational excellence and innovation. Localization and disciplined capital allocation would also remain important.

Pakistan’s automotive sector also recorded significant recovery during FY26. Passenger car and light commercial vehicle sales reportedly increased 39 percent.

Sales under the Pakistan Automotive Manufacturers Association reached more than 206,000 units.

The company linked the recovery to better consumer sentiment and easier financing conditions. Product innovation also contributed to improved market activity.

Measures aimed at rationalizing used vehicle imports provided additional support.

However, used vehicles still represented around 19 percent of the PAMA market. The company said consistent policies remain necessary for local manufacturing.

IMC also reported progress on its sustainability initiatives during FY26.

The company said it became Pakistan’s first automotive company to complete plantation of one million trees nationwide.

It also planted 16,000 mangroves along the Sindh coastline. Around 85 percent of its dealerships now operate using solar energy.

More than 13 percent of local suppliers have also shifted toward solar power.

The company said carbon reduction projects helped lower emissions at its manufacturing facility.

Through its Concern Beyond Cars program, IMC invested Rs377 million in community initiatives. These projects benefited 255,761 people during FY26.

Finance costs increased 40 percent to Rs370 million. The effective tax rate also rose to 40.4 percent from 38.9 percent.

Meanwhile, distribution expenses declined to Rs1.05 billion. They stood at Rs2 billion in the previous financial year.

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The results underline a stronger year for Toyota vehicles and Pakistan’s wider automotive market. However, quarterly margin pressure remains an important challenge for Indus Motor.