Millat Tractors Limited announced its half-yearly results, reporting a 20 percent decline in profit after tax (PAT) year-on-year to Rs. 2.92 billion.
For the second quarter of FY26 (2QFY26), MTL posted an unconsolidated PAT of Rs. 2.4 billion, down 21 percent YoY but up 4.7 times quarter-on-quarter (QoQ). Earnings per share (EPS) for the quarter were Rs. 12.06.
The company declared a cash dividend of Rs. 20 per share for 2QFY26, bringing the first-half payout to 137 percent, exceeding market expectations. Analysts noted that higher-than-expected gross margins supported the strong results.
Gross margins surged to 35 percent in 2QFY26, compared to 25 percent in 2QFY25 and 27 percent in 1QFY26. For the first half of FY26, gross margins averaged 33 percent, up from 27 percent in 1HFY25.
Net sales increased by 7 percent YoY and 2.8 times QoQ to Rs. 20.9 billion. The growth was driven by higher sales of tractors, with 6,335 units sold in 2QFY26, up 2.9 times QoQ. However, 1HFY26 tractor sales fell 16 percent YoY to 8,512 units, largely supported by the Punjab Government’s Green Tractor Scheme.
Distribution expenses rose 29 percent YoY and 2.1 times QoQ due to increased tractor sales. Finance costs declined 27 percent YoY and 15 percent QoQ as short-term borrowings dropped to Rs. 9.1 billion in December 2025.
The company reported a tax expense of Rs. 2.95 billion in 2QFY26, resulting in an effective tax rate of 55 percent, higher than the expected 39 percent. The 1HFY26 ETR stood at 53 percent, compared with 7 percent in 1HFY25.
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MTL is currently trading at an FY26E/FY27F price-to-earnings ratio of 18.7 times and 12.9 times, reflecting investor expectations. Despite lower profits, strong tractor sales highlight the company’s continued market presence.
