Interloop Limited (ILP) announced its 1HFY26 results today, wherein it posted a consolidated profit to Rs. 5.9 billion (EPS of Rs. 4.21), representing a fourfold increase year-on-year (YoY).
In 2QFY26, the company recorded consolidated earnings of Rs. 3.2 billion (EPS of Rs. 2.25). The result was up 2.8 times YoY and 15 percent quarter-on-quarter, mainly due to higher other income and lower finance costs, according to Topline Securities.
Alongside the results, the company announced an interim dividend of Rs. 2 per share for 2QFY26. This marks the company’s first interim dividend announcement in two years.
Other income in 2QFY26 rose 3.4 times YoY and 42 percent QoQ to Rs. 1.0 billion, taking 1HFY26 other income up three times YoY to Rs. 1.7 billion. The increase is attributable to forward booking of export proceeds.
Finance costs declined by 38 percent YoY and 2 percent QoQ to Rs. 1.7 billion in 2QFY26, primarily due to lower interest rates compared to 2QFY25.
Net sales in 2QFY26 increased by 1 percent YoY and remained largely flat QoQ at Rs. 45.0 billion. This takes 1HFY26 net sales to Rs. 90.4 billion, up 3 percent YoY and in line with our expectations.
Gross margins in 2QFY26 stood at 23.43 percent, compared to 20.06 percent in 2QFY25 and 23.27 percent in 1QFY26. For 1HFY26, margins improved to 23.35 percent versus 19.56 percent in 1HFY25, supported by higher sales and a significant reduction in losses in the apparel segment.
The effective tax rate stood at 42.53 percent in 2QFY26 (5.17 percent of turnover), compared to 30.42 percent in 2QFY25 (1.13 percent of turnover) and 39.52 percent in 1QFY26 (3.96 percent of turnover). This takes the 1HFY26 effective tax rate to 41.17 percent (4.57 percent of turnover), versus 43.71 percent in 1HFY25 (1.32 percent of turnover).
In 2QFY26, distribution expenses fell by 28 percent YoY and 17 percent QoQ to Rs. 1.3 billion. Administrative expenses increased by 6 percent YoY and 2 percent QoQ to Rs. 2.8 billion. Other expenses, however, declined by 24 percent YoY and 56 percent QoQ to Rs. 265 million.
Topline maintains ots BUY call ffor the stock with an FY26E/FY27F price-to-earnings ratio of 11.4 times and 6.9 times, respectively.
