KARACHI, April 27 — Indus Motor Company on Monday warned that escalating geopolitical tensions in the Middle East are weighing on Pakistan’s auto industry outlook, despite signs of recovery in the broader economy and vehicle demand.
In its financial results for the nine months ended March 31, 2026, submitted to the Pakistan Stock Exchange, the company said rising global oil prices and external pressures could undermine macroeconomic stability and dampen consumer purchasing power in the coming months.
Pakistan’s economy showed gradual improvement during the period, with GDP growth estimated at around 3.5%, while inflation eased to 7.3%. Foreign exchange reserves stood at $21.89 billion as of March 31, supporting relative exchange rate stability. The State Bank of Pakistan maintained a cautious monetary stance, keeping the policy rate at 10.5%.
Fiscal consolidation efforts also continued, with the deficit contained at about 6% of GDP, below the annual target of 6.8%. The report highlighted progress under the IMF’s Extended Fund Facility, noting that a staff-level agreement unlocked about $1 billion in additional disbursements, lifting total inflows under IMF-linked programs to roughly $4.5 billion.
Despite macroeconomic stabilization, Indus Motor said geopolitical uncertainty remains a key risk factor. “Rising oil prices due to Middle East tensions may exert inflationary pressure and increase external financing challenges,” the company said.
Pakistan’s auto sector continued its recovery, with passenger car and light commercial vehicle sales rising 42.8% year-on-year to 144,029 units. However, capacity utilization remains low at around 40%, reflecting structural constraints and sensitivity to policy and currency fluctuations.
Industry imports of used vehicles rose 21.8%, though regulatory tightening is expected to gradually curb inflows and support local manufacturing.
Indus Motor reported strong operational performance, with nine-month vehicle sales rising 53.4% to 33,572 units. Net profit increased to Rs19.39 billion, up from Rs16.55 billion a year earlier, supported by higher volumes, cost efficiencies and localization gains.
Earnings per share rose to Rs246.80, while the board declared a third interim dividend of Rs51 per share.
Looking ahead, the company expects steady demand but warned that higher fuel costs, currency pressure and tighter financing conditions could weigh on growth unless policy support improves.