Mari Energies Limited (MARI) reported earnings of Rs. 21.1 billion (EPS: Rs. 17.6/share) in 3QFY26, marking a 33 percent YoY increase, supported by stronger revenues and a lower effective tax rate.

Net sales for the quarter rose 6 percent YoY to Rs. 48.1 billion, driven by higher production activity, with oil output increasing 13 percent YoY to 1,282 bopd and gas production up 4 percent YoY to 946 mmcfd. Within key fields, HRL production grew 2 percent YoY, while Shewa output surged nearly 11x YoY, contributing significantly to overall volumes.

Exploration costs rose sharply by 68 percent YoY to Rs. 4.9 billion and were nearly 3x higher QoQ, primarily due to dry well expenses from Pario-1 booked during the quarter, compared to no such charges in 3QFY25 and 2QFY26.

Finance income declined 29 percent YoY to Rs. 1.3 billion, reflecting a lower interest rate environment versus the same period last year. The company also recorded a tax charge of Rs. 0.2 billion, resulting in an effective tax rate of 1 percent, significantly lower than 29 percent in SPLY, though management has not yet clarified this unusually low level.

On the balance sheet side, cash declined to Rs. 58.6 billion in 3QFY26 from Rs. 60.8 billion in the previous quarter, while trade receivables increased to Rs. 92.0 billion from Rs. 88.7 billion.

MARI is currently trading at forward FY26/FY27 P/E multiples of 14x/9x, with an estimated dividend yield of 3 percent/5 percent.