Textile firms' profits surge 66% to over Rs20 billion in FY26 on higher exports, improved margins

AKD Research reported that the combined net profit of Interloop, Nishat Mills and Nishat Chunian climbed 66% to Rs20.2 billion in FY26. The brokerage credited stronger exports, better gross margins and lower financing costs for the jump. Combined earnings stood at Rs12.2 billion in FY25, while revenue grew 3% to Rs451.3 billion.

Exports rose 7% to $1.1 billion, with gains in hosiery, denim, apparel and workwear. Domestic sales, however, fell 5% to Rs138.9 billion. Gross margin widened to 15.6% from 14.7% because of smaller initial operating losses as new capacity reached higher utilisation, although lower export prices offset part of the gain. Finance costs fell 23% to Rs17.5 billion, and the effective tax rate dropped to 33% from 43%, helped by the remeasurement of deferred tax liabilities after the super tax cut in the FY27 federal budget.

Interloop recorded the steepest rise, with earnings per share up 145% to Rs9.39, while Nishat Chunian's rose 103% to Rs6.66. Nishat Mills was the exception, as its earnings per share fell 9% to Rs15.59 on weaker margins and lower dividend income. In the fourth quarter, combined net profit grew 51% to Rs5.86 billion, from Rs3.88 billion a year earlier.