First Habib Modaraba (FHM) has reported an encouraging financial performance for the first quarter ended September 30, 2026, with its profit after taxation increasing by approximately 12% compared to the corresponding period last year. The company’s latest unaudited financial statements reflect improved earnings, higher financing disbursements and continued growth in its overall business operations.

According to the quarterly financial report, First Habib Modaraba recorded a net profit of Rs.207.22 million during the quarter, compared to Rs.184.99 million in the same period of the previous year. Earnings per certificate also improved to Rs.1.87 from Rs.1.67, indicating stronger profitability for certificate holders.

Financing Business Shows Positive Growth

The company’s financing operations remained a key contributor to its performance. First Habib Modaraba made financing disbursements of Rs.5.89 billion during the first quarter, compared to Rs.5.23 billion in the corresponding period last year.

Income from diminishing musharaka financing increased to Rs.1.39 billion from Rs.1.12 billion, demonstrating growth in the company’s core financing activities.

The company’s total assets also expanded to Rs.43.42 billion as of September 30, 2026, compared to Rs.41.73 billion at the end of June 2026. This increase reflects the expansion of its business volumes and financing portfolio.

Strong Credit Rating Maintained

Another positive development is the continuation of First Habib Modaraba’s strong credit profile. Pakistan Credit Rating Agency (PACRA) maintained the company’s long-term rating at AA+ and short-term rating at A1+.

According to the management, the company has maintained these ratings for 19 consecutive years, reflecting its sound asset quality, prudent risk management, strong financial profile and established governance framework.

Economic Challenges Remain a Concern

Despite its positive quarterly results, the company acknowledged that Pakistan’s economic environment continues to face several challenges.

Higher inflation, rising energy costs, global oil price volatility and geopolitical tensions in the Middle East remain important concerns for businesses. The State Bank of Pakistan increased its policy rate by 50 basis points to 12% in its monetary policy announcement dated October 26, 2026.

The management also highlighted concerns regarding public debt, external account pressures and the country’s dependence on remittances amid relatively weak export performance and a growing trade deficit.

These economic conditions could influence financing demand, operating costs and investor sentiment in the coming quarters.

Management Remains Cautiously Optimistic

Looking ahead, First Habib Modaraba’s management expects the business environment to remain challenging due to inflationary pressures and broader economic uncertainties. However, the company remains confident about maintaining its growth momentum through a focused business strategy, disciplined financial management and a prudent approach to risk.

The management also appreciated the continued support of regulators, customers, certificate holders, investors and employees, acknowledging their contribution to the company’s satisfactory performance.

Outlook for Investors

First Habib Modaraba’s first-quarter results indicate an improvement in profitability and financing activity. Higher net profit, improved earnings per certificate, increased disbursements and a maintained strong credit rating are positive developments.

However, investors should also consider the impact of rising financial charges, inflation and broader economic uncertainty when evaluating the company’s future performance.

Overall, First Habib Modaraba has started FY2026-27 on a positive note, demonstrating resilience and business growth despite challenging economic conditions. Its performance in the coming quarters will depend on its ability to manage financing costs, maintain asset quality and sustain profitable business expansion.