Millat Tractors Limited Half-Yearly Results FY26
Millat Tractors Limited has announced its half-yearly financial results for FY26, reporting a 20 percent year-on-year decline in profit after tax. The company posted a profit of Rs. 2.92 billion for 1HFY26, reflecting pressure compared to the same period last year. Despite the drop in earnings, certain operational indicators such as gross margins and quarterly sales performance showed noticeable improvement.
The Millat Tractors Limited Half-Yearly Results FY26 highlight a mixed financial picture. While overall profitability declined, better margins and a strong second quarter helped exceed some market expectations. Investors closely tracked these results as the company remains one of the key players in Pakistan’s agricultural machinery sector.
- 1HFY26 profit after tax at Rs. 2.92 billion
- 20 percent YoY decline in earnings
- Stronger quarterly recovery in 2QFY26
- Margins performed better than expectations
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2QFY26 Performance in Millat Tractors Limited Half-Yearly Results FY26
During the second quarter of FY26, the company posted an unconsolidated profit after tax of Rs. 2.4 billion, with earnings per share recorded at Rs. 12.06. Although this figure reflects a 21 percent decline on a year-on-year basis, it shows a significant 4.7 times increase compared to the previous quarter. This sharp quarterly improvement indicates operational recovery.
The quarter’s performance was supported by higher gross margins and increased tractor sales. Analysts noted that profitability exceeded expectations mainly because margins were stronger than forecasted. The quarterly rebound helped balance weaker performance seen earlier in the fiscal year.
- 2QFY26 PAT at Rs. 2.4 billion
- EPS reported at Rs. 12.06
- 21 percent YoY decline
- 4.7 times QoQ growth
- Margin expansion supported earnings
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| Financial Metric | 2QFY26 | YoY Change | QoQ Change |
|---|---|---|---|
| Profit After Tax | Rs. 2.4 billion | -21% | 4.7x |
| EPS | Rs. 12.06 | Decline | Strong increase |
Revenue Growth and Gross Margin Expansion
Net sales increased by 7 percent year-on-year and surged 2.8 times quarter-on-quarter to Rs. 20.9 billion in 2QFY26. The strong quarterly rise was mainly driven by improved tractor sales volumes. Higher demand and better pricing contributed to revenue growth during the quarter.
Gross margins rose sharply to 35 percent in 2QFY26 compared to 25 percent in 2QFY25 and 27 percent in 1QFY26. As a result, the half-year gross margin reached 33 percent, up from 27 percent in 1HFY25. The improvement in margins played a critical role in stabilizing profitability.
- Net sales at Rs. 20.9 billion
- 7 percent YoY revenue growth
- 2.8 times QoQ increase
- Gross margin improved to 35 percent
- 1HFY26 margin at 33 percent
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Tractor Sales Volume and Government Support
The company sold 6,335 tractors in 2QFY26, marking a 2.9 times increase compared to the previous quarter. This significant jump in volumes contributed directly to higher revenue and better absorption of fixed costs. However, on a half-year basis, total tractor sales stood at 8,512 units, reflecting a 16 percent YoY decline.
A notable factor behind sales stability was support from the Punjab Government’s Green Tractor Scheme. Without this scheme, overall volumes could have been lower. Government-backed initiatives played an important role in sustaining demand within the agricultural machinery market.
- 6,335 tractors sold in 2QFY26
- 2.9 times QoQ growth in units
- 8,512 units sold in 1HFY26
- 16 percent YoY decline in half-year volumes
- Supported by Green Tractor Scheme
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Dividend Announcement and Shareholder Returns
Along with the Millat Tractors Limited Half-Yearly Results FY26, the company announced a cash dividend of Rs. 20 per share for 2QFY26. This brings the cumulative payout for 1HFY26 to 137 percent, which was higher than market expectations.
The strong dividend announcement provided some relief to investors despite the overall profit decline. A higher payout ratio signals management’s confidence in cash flow stability and operational strength, even in a challenging economic environment.
- Rs. 20 per share cash dividend
- 137 percent half-year payout ratio
- Higher than market expectations
- Positive signal for shareholders
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Expense Trends and Finance Cost Reduction
Distribution expenses increased by 29 percent year-on-year and 2.1 times quarter-on-quarter. The rise was mainly due to higher tractor sales, which increased logistics and selling-related costs. As sales volume grows, distribution expenses naturally expand alongside operational activities.
On the other hand, finance costs declined 27 percent YoY and 15 percent QoQ in 2QFY26. This improvement resulted from a reduction in short-term borrowings to Rs. 9.1 billion in December 2025, compared to Rs. 17.3 billion in September 2025 and Rs. 14.0 billion in June 2025.
- Distribution expenses up 29 percent YoY
- Higher costs due to increased sales
- Finance costs down 27 percent YoY
- Short-term borrowings reduced significantly
- Improved balance sheet management
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Taxation Impact on Millat Tractors Limited Half-Yearly Results FY26
The company recorded a tax expense of Rs. 2.95 billion in 2QFY26, leading to an effective tax rate of 55 percent. This was significantly higher than the expected 39 percent. In comparison, the company had reported a tax reversal of Rs. 67 million in 2QFY25.
For the half year, the effective tax rate stood at 53 percent, compared to only 7 percent in 1HFY25. The sharp rise in taxation heavily impacted bottom-line profitability and remained one of the key reasons behind the YoY decline in earnings.
| Tax Indicator | 2QFY26 | 2QFY25 |
|---|---|---|
| Tax Expense | Rs. 2.95 billion | Tax reversal Rs. 67 million |
| Effective Tax Rate | 55% | Lower base |
- High tax expense reduced net profit
- Effective tax rate at 55 percent
- Significant jump compared to last year
- Major factor in earnings decline
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Valuation and Market Position
Millat Tractors Limited is currently trading at an FY26E price-to-earnings ratio of 18.7 times and FY27F multiple of 12.9 times. These valuation levels reflect both current earnings pressure and expectations of future improvement.
Investors are likely to monitor tractor demand trends, government policy support, and taxation developments in upcoming quarters. Sustainable margins and reduced borrowing levels may help stabilize earnings going forward.
- FY26E P/E at 18.7x
- FY27F P/E at 12.9x
- Future outlook linked to demand recovery
- Monitoring government support policies
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FAQs
What was the profit after tax in Millat Tractors Limited Half-Yearly Results FY26?
The company reported a profit after tax of Rs. 2.92 billion for 1HFY26, reflecting a 20 percent YoY decline.
Why did profit decline despite higher sales?
Higher taxation and earlier period weakness impacted overall earnings despite improved margins and strong quarterly sales.
How many tractors were sold in 2QFY26?
Millat Tractors sold 6,335 units in 2QFY26, showing a strong quarter-on-quarter increase.
What dividend did the company announce for 2QFY26?
The company announced a cash dividend of Rs. 20 per share for the second quarter of FY26.
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