First IBL Modaraba posted a profit after tax of Rs11.73 million for the nine months ended March 31, 2026, although earnings remained below the Rs18.70 million recorded in the corresponding period of the previous year.

According to the unaudited quarterly report, the Modaraba generated total income of Rs34.74 million during the nine-month period, compared with Rs38.65 million a year earlier. Profit per Modaraba certificate stood at Rs0.54, down from Rs0.86 in the same period last year.

Core business remains a key contributor

The Modaraba’s core business activities, comprising Ijarah and Musharakah, generated Rs22.81 million during the quarter ended March 31, 2026, accounting for 63.55% of aggregate income for the period. The company said its operating expenses declined by 27.94%, reflecting the impact of cost-control measures.

For the nine months, income from Ijarah stood at Rs14.90 million, while profit on Musharakah investments amounted to Rs7.18 million. Together, these activities generated Rs22.08 million, compared with Rs20.01 million in the same period of 2025.

However, other income fell considerably to Rs12.66 million from Rs18.64 million a year earlier, largely reflecting changes in investment-related and other income streams. Profit on deposits contributed Rs12.66 million during the period.

Profitability under pressure

The Modaraba reported an operating profit of Rs18.73 million for the nine months, compared with Rs20.84 million in the corresponding period. After management fees and workers’ welfare fund charges, profit before taxation stood at Rs16.52 million, down from Rs18.38 million.

Taxation further affected the bottom line, with a current-period tax charge of Rs4.79 million. As a result, profit for the period settled at Rs11.73 million.

On a quarterly basis, profit after tax was Rs4.74 million, compared with Rs10.88 million in the quarter ended March 31, 2025.

Balance sheet expands

Despite the pressure on earnings, First IBL Modaraba continued to expand its balance sheet. Total assets increased to Rs282.17 million as of March 31, 2026, from Rs267.83 million at June 30, 2025.

Total liabilities rose moderately to Rs32.25 million from Rs29.64 million, while net assets increased to Rs249.92 million, compared with Rs238.19 million at the end of June 2025.

The Modaraba also maintained a strong cash position, with cash and bank balances of Rs184.34 million at March 31, 2026, compared with Rs182.03 million at June 30, 2025.

Management control change underway

A significant development highlighted in the report is the proposed change in management control of First IBL Modaraba and its management company.

The Securities and Exchange Commission of Pakistan (SECP) approved the change in management control in favour of ZTP (Private) Limited through a letter dated February 10, 2026, subject to compliance with applicable legal and regulatory requirements. The company said the process was at an advanced stage and expected to be completed in the near future.

Outlook

First IBL Modaraba said Pakistan’s economy showed signs of gradual recovery between July 2025 and March 2026, with inflation coming under relative control and economic activity resuming at a modest pace. However, the company noted that the recovery remained fragile because of structural weaknesses, limited fiscal space and subdued investment activity.

Against this backdrop, the Modaraba said it continued to adopt cautious risk-management policies and focus on selective, quality clients to minimize repayment risks.

Overall, First IBL Modaraba remained profitable during the nine months ended March 2026, supported by its Ijarah and Musharakah businesses and tighter cost management. While lower other income and higher taxation weighed on earnings, growth in assets and net assets, together with the anticipated management-control transition, could remain important developments for the Modaraba going forward.