Millat Tractors Limited (MTL) announced a 20% year-on-year decline in profit after tax (PAT) for the first half of FY26, totaling Rs. 2.92 billion. For 2QFY26, the company posted a PAT of Rs. 2.4 billion (EPS: Rs. 12.06), down 21% YoY but up 4.7 times quarter-on-quarter.
Net sales increased 7% YoY and 2.8 times QoQ to Rs. 20.9 billion, driven by 6,335 tractor units sold in 2QFY26, supported largely by the Punjab Government’s Green Tractor Scheme. Gross margins rose to 35% in 2QFY26, up from 25% in 2QFY25, bringing 1HFY26 margins to 33%.
The company declared a cash dividend of Rs. 20 per share for 2QFY26, exceeding market expectations. Distribution expenses rose 29% YoY due to higher sales, while finance costs declined 27% YoY following reduced short-term borrowings.
MTL recorded a tax expense of Rs. 2.95 billion in 2QFY26, resulting in an effective tax rate (ETR) of 55%, significantly above the expected 39%. The stock is currently trading at an FY26E/FY27F P/E ratio of 18.7x and 12.9x, respectively.
