KARACHI: Nagina Cotton Mills Limited (PSX: NCML) reported a modest increase in profitability for the nine months ended March 31, 2026, supported by improved gross margins and lower finance costs, despite a sharp rise in taxation.

According to the company’s condensed interim financial results, net profit increased to Rs80.14 million, up from Rs75.57 million recorded during the corresponding period last year, reflecting a growth of around 6%. Earnings per share (EPS) also improved to Rs4.29, compared with Rs4.04 in the same period of FY2025.

Net sales remained largely stable at Rs15.44 billion, compared with Rs15.43 billion a year earlier. However, the company managed to improve its gross profit to Rs1.21 billion, compared with Rs1.14 billion in the previous year, as the cost of goods sold declined slightly despite steady revenues.

Operating profit stood at Rs809.92 million, marginally lower than Rs835.83 million reported in the corresponding period last year. Meanwhile, finance costs declined significantly to Rs460.83 million from Rs532.15 million, providing support to the company’s bottom line amid a high-interest-rate environment.

Profit before taxation rose to Rs265.61 million, compared with Rs159.41 million in the same period last year. However, the company recorded a substantially higher tax charge of Rs185.48 million, more than double the Rs83.84 million booked a year earlier, limiting the overall growth in net earnings.

On the financial position front, total assets stood at Rs13.06 billion as of March 31, 2026, compared with Rs14.60 billion at the end of June 2025. The decline was mainly driven by lower inventories, which fell to Rs2.46 billion from Rs4.64 billion, while cash and bank balances increased substantially to Rs342.62 million from Rs107.06 million.

The company’s total equity strengthened to Rs4.82 billion, compared with Rs4.76 billion at the end of the previous financial year, reflecting retained earnings growth. Total liabilities, meanwhile, declined to Rs8.24 billion from Rs9.84 billion, supported by a significant reduction in short-term borrowings.

The latest results indicate that Nagina Cotton Mills maintained operational resilience during the period through improved margins and reduced financing costs, although higher taxation continued to weigh on overall profitability.