Indus Motor Company reported a profit of Rs. 6.7 billion for the third quarter of fiscal year 2026, as higher vehicle sales and improved margins helped the automaker deliver earnings slightly above market expectations.

Earnings per share stood at Rs. 85.21 for the quarter, up 2% from a year earlier and 12% higher than the previous quarter, according to a brokerage report issued on April 27.

The latest quarterly result took the company’s profit for the first nine months of fiscal year 2026 to Rs. 19.4 billion, with earnings per share rising to Rs. 246.8, compared with Rs. 16.6 billion, or Rs. 210.6 per share, in the same period last year.

The company also announced an interim cash dividend of Rs. 51 per share, taking its total payout for the first nine months of the fiscal year to Rs. 148 per share. That implies a payout ratio of 60%.

The brokerage said the result came in slightly above expectations mainly because gross margins were stronger than anticipated.

Gross margins stood at 15.5% in the third quarter, down from 16.9% a year earlier but up from 13.1% in the previous quarter. For the nine-month period, gross margins improved slightly to 15.3% from 15.1% a year ago.

The year-on-year decline and quarter-on-quarter recovery in margins were attributed to changes in product mix. Sales of Corolla, Yaris and Cross variants remained higher relative to Fortuner and Hilux on an annual basis, while quarterly performance improved as the contribution from higher-end models recovered. Sales of Fortuner and Hilux rose 53% from the previous quarter, helped by a discount offer on the petrol variant of Fortuner.

Net sales rose 20% from a year earlier and 27% from the previous quarter to Rs. 72.8 billion in the three months ended March. Unit sales increased 40% year-on-year and 19% quarter-on-quarter to 12,750 vehicles, compared with 9,077 units in the same quarter last year and 10,674 units in the preceding quarter.

The effective tax rate stood at 42.2% in the third quarter, compared with 38.9% a year earlier and 42.8% in the previous quarter. For the first nine months of the fiscal year, the effective tax rate rose to 41.5% from 39.2% in the same period last year.

In a separate notice, Indus Motor said it had approved an additional Rs. 1 billion investment to expand localization, taking the total planned investment to Rs. 5.1 billion. The new allocation is expected to be completed by 2027, while the remaining Rs. 4.1 billion is targeted for completion by 2026.

The brokerage said the stock is currently trading at an estimated fiscal year 2026 price-to-earnings ratio of 5.4 times and offers a dividend yield of 11%.