Millat Tractors Limited closed 4QFY26 with a sharp sequential drop in earnings. Profit after tax came in at PKR 1.80 billion, or EPS of PKR 4.52, down 42% from PKR 3.12 billion in the previous quarter.
Volumes were not the weak link. The company sold more machines and lifted revenue. Profit still fell because margins gave way.
Sales Grew While Gross Margin Compressed
Net sales stood at PKR 18.19 billion, up 50% year on year and 6% quarter on quarter. Unit sales reached 5,784 tractors, against 4,578 in 3QFY26 and 4,062 a year earlier.
Gross profit declined 28% sequentially to PKR 4.60 billion. Gross margin contracted by 12 percentage points to 25%. That squeeze drove most of the drop in quarterly profit.
Other Lines Could Not Rescue The Print
Distribution and marketing costs were flat versus the third quarter. Administration expenses eased slightly. Other income rose from a low base, and finance costs were 49% lower than last year.
Profit before tax still fell 31% quarter on quarter to PKR 3.37 billion. A higher effective tax rate then left profit after tax down 42%.
Full-Year Results Remain In Growth Territory
For FY26, net sales rose 22% to PKR 63.76 billion. Annual profit after tax increased 23% to PKR 7.84 billion, equal to EPS of PKR 19.65.
A cash dividend of PKR 11 per share was declared for the quarter. Cumulative dividends for the year total PKR 21 per share, below PKR 30 in FY25.
Why The Sequential Drop Matters
Higher deliveries show demand is still there. The margin reset is the story of this quarter. Pricing, mix, and input costs will decide whether 25% gross margin was a blip.
Year-on-year growth and a cash payout keep the annual picture intact. This print is still defined by the 42% quarter-on-quarter decline in profit after tax.