ILP

⚡ Flash Summary

Interloop Limited’s unaudited financial results for Q1 2026 show a positive trajectory. Net sales increased to PKR 43.77 billion, up from PKR 41.63 billion in Q1 2025. Profit for the period surged significantly to PKR 2.797 billion compared to PKR 222 million in the same period last year. Basic and diluted earnings per share (EPS) also rose sharply from PKR 0.16 to PKR 2.00.

📌 Key Takeaways

• 📈 Revenue growth: Net sales increased by approximately 5.1% YoY, reaching PKR 43.77 billion.
• 💰 Profitability surge: Profit for the period jumped dramatically, increasing by 1158.5% to PKR 2.797 billion.
• ⭐ EPS boost: Earnings per share saw a substantial rise from PKR 0.16 to PKR 2.00.
• 📊 Gross profit margin improved: Gross profit increased from PKR 7.76 billion to PKR 10.18 billion.
• 🛑 No dividends: The company did not declare any cash dividend, bonus shares, or right shares for the quarter.
• 💼 Operational efficiency: Administrative expenses increased from PKR 2.25 billion to PKR 2.55 billion.
• 💸 Finance cost reduction: Finance costs decreased significantly from PKR 2.85 billion to PKR 1.70 billion.
• 🧾 Tax impact: Income tax expenses increased substantially from PKR 77.7 million to PKR 1.75 billion.
• ✅ Asset base: The company’s total assets stand at PKR 174.42 billion as of September 30, 2025.
• 🏦 Liabilities: Total equity and liabilities amount to PKR 174.42 billion.
• 🌱 Reserves: The company holds PKR 3.16 billion in reserves.
• 💼 Unappropriated profit: The unappropriated profit is PKR 40.84 billion.
• 💵 Cash position: Cash and bank balances slightly increased to PKR 360.23 million from PKR 357.52 million.
• 🏭 Non-current assets: Property, plant, and equipment stand at PKR 81.88 billion.

🎯 Investment Thesis

Based on the strong Q1 2026 financial results, a BUY recommendation is warranted. The substantial increase in profit and EPS, coupled with revenue growth and decreasing finance costs, indicates improved operational efficiency and financial health. A price target of PKR 35 is set, based on a P/E ratio of 17.5x, in a medium-term horizon, assuming the company can maintain this level of performance.

⚡ Flash Summary

Interloop Limited’s Corporate Briefing Session 2025 highlights a company with a strong emphasis on sustainable and ethical practices. The company has a diverse product mix, including hosiery, denim, apparel, and activewear. The company has shown sales growth with a CAGR of 33% in PKR and 16% in USD since 2021. ILP’s Sales have grown at a 4-year CAGR of 33%, and in FY’25, their multi-category strategy led them to achieve a staggering 11% YoY surge.

📌 Key Takeaways

• 🌎 Interloop is committed to being an agent of positive change with ethical and sustainable business practices.
• 🏭 The company has a large production capacity, including 753 million pairs of socks, 9.5 million denim garments, 34 million apparel garments, and 7.6 million activewear garments.
• 🇵🇰 Interloop is Pakistan’s largest listed apparel company on the PSX.
• 📈 The company’s sales have grown with a CAGR of 33% in PKR term and 16% in USD term since 2021.
• 🏆 Interloop received the Environmental Excellence Award by Adidas.
• 🏆 Interloop’s Sock lab awarded at ISPO Tex Trends FW 2026/27, Munich.
• 💻 Enhanced ERP & MES systems, embedded Al & digital tools, strengthened IT governance.
• 🌱 Interloop is focused on responsible manufacturing, meeting high standards of environmental and social performance.
• ⚡ Installed solar capacity 17.3 MW, with the goal to reach 25 MW by 2025-26.
• 🤝 Honored to be part of Nike’s 15-member Supplier Sustainability Council (SSC).
• 🚀 Apparel expansion: Plants operating with an annual capacity of ~34 million pieces.

🎯 Investment Thesis

Interloop Limited presents a compelling investment opportunity due to its strong sales growth, capacity expansion, and commitment to sustainability. While recent profitability has declined, the company’s strategic initiatives and multi-category approach position it for future success. BUY. The company is dedicated to increasing capacity.

⚡ Flash Summary

Interloop Limited (ILP) reported a strong start to FY2026, demonstrating resilience amidst a challenging economic backdrop. The company recorded a 5.14% increase in unconsolidated revenue, reaching Rs. 43,774 million, and a substantial 31.25% rise in gross profit. This growth was primarily attributed to a favorable sales mix, effective cost management, and improved utilization. Profit after taxation surged to Rs. 2,797 million, with earnings per share (EPS) improving significantly to Rs. 2.00, reflecting enhanced operating margins and efficient cost control.

📌 Key Takeaways

• 📈 Revenue growth of 5.14% (unconsolidated) and 5.7% (consolidated) year-over-year, indicating sustained momentum.
• 💰 Unconsolidated Gross Profit surged by 31.25% to Rs. 10,183 million, showcasing improved profitability.
• 📊 Consolidated Gross Profit increased by 29.2% to Rs. 10,520 million.
• 🚀 Unconsolidated Profit from Operations soared by 67.72% to Rs. 6,241 million, driven by controlled operating expenses.
• ✅ Consolidated Profit from Operations increased by 62.3% to Rs. 6,237 million.
• 💸 Financial costs decreased by 41% due to reduced borrowings, boosting net profit.
• ⭐ Unconsolidated Net Profit after taxation surged to Rs. 2,797 million, a 1,158.53% increase.
• 🌟 Consolidated Net Profit after tax surged to Rs. 2,742 million, a 720% increase.
• 🧾 Unconsolidated EPS improved to Rs. 2.00 from Rs. 0.16 in the same period last year.
• 💎 Consolidated EPS improved significantly to Rs. 1.96 from Rs. 0.24.
• 🌍 Textile exports increased by 5.6% year-on-year, reaching USD 4.8 billion.
• 🧶 Knitwear led sector growth with a 12.2% increase to USD 1.4 billion.
• ✅ Pakistan reached a staff-level agreement with the IMF, expected to unlock further external financing.
• 🌱 The company obtained BCI certification across all units for traceable and sustainable cotton sourcing.

🎯 Investment Thesis

Interloop Limited presents a compelling investment opportunity based on its strong Q1 FY2026 results, demonstrating robust revenue growth, improved profitability, and efficient cost management. Given the impressive surge in EPS and profit after taxation, I recommend a BUY rating with a price target of Rs. 180, based on an estimated P/E ratio of 15x FY26 EPS, within a medium-term horizon of 12-18 months.