INTERLOOP LIMITED – FY2026 Results Review

Current Price: ~100 | Dividend Yield: ~4%

💰 Dividend Announcement

The Board has recommended a final cash dividend of Rs. 2.00 per share. Combined with the interim dividend of Rs. 2.00 per share already paid, the total dividend for FY2026 stands at Rs. 4.00 per share.

No bonus shares or right shares were announced.

The dividend will be paid to shareholders registered by October 6, 2026.

📊 Financial Performance – An Exceptional Turnaround

Interloop has delivered a very strong FY2026 earnings recovery, with consolidated profit more than doubling, EPS more than doubling, and operating profitability improving substantially. The improvement is visible in both the core business and consolidated results.

Revenue:

Consolidated sales increased 4.6% to Rs. 187.70 billion from Rs. 179.41 billion – modest top-line growth, but the real story lies in margins.

Profitability:

Gross profit increased 16.4% to Rs. 42.78 billion from Rs. 36.76 billion. Operating profit surged 40.6% to Rs. 26.25 billion from Rs. 18.66 billion.

Profit before tax more than doubled, increasing 119.6% to Rs. 20.00 billion from Rs. 9.11 billion. Profit after tax surged 120.5% to Rs. 12.45 billion from Rs. 5.65 billion.

Earnings Per Share:

EPS jumped 128% to Rs. 9.06 from Rs. 3.96.

📈 Margins Improved Significantly

The most important feature is that profit grew much faster than revenue:

Gross margin improved from approximately 20.5% to 22.8%
Operating margin improved from approximately 10.4% to 14.0%

This is a significant improvement in underlying operating efficiency.

🟢 Finance Cost Declined Sharply

Finance cost decreased by approximately 35% to Rs. 6.21 billion from Rs. 9.58 billion. This provided a significant boost to pre-tax profitability and helped convert improved operating performance into much higher PBT.

💰 Operating Cash Flow – Major Improvement

This is the most important positive. Operating cash flow jumped from Rs. 2.93 billion to Rs. 16.33 billion – a dramatic improvement that confirms the earnings are backed by actual cash generation, not just accounting adjustments.

💰 Key Takeaways

Strengths:

PAT more than doubled – up 120.5%
EPS jumped 128% to Rs. 9.06
Operating profit up 40.6%
Gross margin improved from 20.5% to 22.8%
Operating margin improved from 10.4% to 14.0%
Finance cost declined 35%
Operating cash flow jumped from Rs. 2.93B to Rs. 16.33B
Equity increased 15% to Rs. 66.33 billion
Long-term financing reduced 22.5%
Total dividend of Rs. 4.00 per share
Capex significantly lower than FY2025

Concerns:

Revenue growth was only 4.6%
Inventory increased 20.4%
Trade receivables increased 14%
Short-term borrowings remain high at Rs. 60.55 billion
Cash balance declined substantially
Large financing repayments continue

💡 Investment Commentary

ILP has delivered a genuine earnings turnaround in FY2026. The combination of improved gross margins, much stronger operating profitability, sharply lower finance costs, and a major improvement in operating cash flow makes this a fundamentally strong result.

The most impressive point is that ILP did not need spectacular revenue growth to generate exceptional earnings growth. Instead, margin expansion, cost control, and lower finance costs drove the bottom line.

At the current price of approximately Rs. 100, the stock offers a dividend yield of approximately 4% and trades at a P/E of roughly 11x on trailing earnings.

For income investors: The Rs. 4.00 per share total dividend provides a solid income stream.

For growth investors: The earnings turnaround is exceptional, but future growth needs to be supported by improved core sales, not just margin and finance cost benefits.

For long-term investors: The strengthening balance sheet, improved cash generation, and reduced long-term debt make this an attractive proposition, though working capital intensity and short-term borrowings warrant monitoring.

ILP has delivered a genuine earnings turnaround – the next catalyst is whether the company can sustain these improved margins and convert stronger profitability into continued balance-sheet improvement.

Disclaimer: This is for educational and informational purposes only and does not constitute financial advice.

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INTERLOOP LIMITED – FY2026 Results Review