Shams Textile Mills Reports Higher Revenue but Wider Loss of Rs80 Million in First Quarter FY2026-27
Shams Textile Mills Limited has reported an increase in revenue for the first quarter ended September 30, 2026, but the company continued to face profitability challenges as rising production costs and operating expenses pushed its net loss higher compared with the corresponding period last year.
According to the company’s unaudited financial results submitted to the Pakistan Stock Exchange (PSX), revenue increased to Rs950.30 million during the quarter, compared with Rs919.10 million in the same period of the previous year.
Despite the improvement in sales, the company’s cost of sales rose to Rs944.60 million from Rs892.86 million, significantly reducing its gross profit. Consequently, gross profit declined to just Rs5.70 million against Rs26.24 million in the corresponding quarter last year.
Operating Expenses Put Pressure on Earnings
The company’s financial performance remained under pressure due to higher operating expenses. Distribution costs increased to Rs5.46 million from Rs4.85 million, while administrative expenses reached Rs37.08 million compared with Rs33.84 million in the same period last year.
Shams Textile Mills recorded an operating loss of Rs33.54 million, significantly higher than the Rs8.67 million operating loss reported in the corresponding quarter of 2025.
Other income stood at Rs3.29 million, compared with Rs4.15 million a year earlier, providing limited support to the company’s overall financial performance.
Finance Costs and Net Loss
Finance costs amounted to Rs34.67 million during the quarter, slightly lower than Rs35.65 million recorded in the same period last year. However, the reduction was insufficient to offset the pressure from weaker gross profitability and higher operating expenses.
The company’s loss before levy increased to Rs68.21 million from Rs44.32 million. After accounting for a levy of Rs11.88 million, the net loss reached Rs80.09 million, compared with Rs55.81 million in the corresponding quarter of the previous year.
Loss per share also deteriorated to Rs9.27 against Rs6.46 in the same period last year, reflecting the impact of the company’s weaker financial performance on shareholders.
Financial Position and Cash Flow
The company’s balance sheet showed total assets of Rs2.74 billion as of September 30, 2026, compared with Rs2.68 billion at June 30, 2026. However, total equity declined to Rs669.47 million from Rs736.08 million.
Total liabilities increased to Rs2.07 billion from Rs1.95 billion, indicating continued pressure on the company’s financial position.
On the cash flow side, Shams Textile Mills reported net cash used in operating activities of Rs68.98 million, considerably lower than the Rs456.23 million cash outflow recorded in the corresponding period last year.
Cash and cash equivalents stood at Rs33.35 million at the end of September 2026, compared with Rs1.45 million at the end of September 2025.
No Dividend or Bonus Shares Announced
Alongside its financial results, the company informed the Pakistan Stock Exchange that its board had not recommended any cash dividend, bonus shares, or right shares for the period ended September 30, 2026. No other corporate entitlement or price-sensitive information was announced.
Outlook
The latest financial results highlight the challenges facing Shams Textile Mills as higher sales have not translated into improved profitability. Although revenue recorded moderate growth, the substantial increase in production costs and administrative expenses significantly affected the company’s margins.
Going forward, improving gross margins, controlling operating expenses, and managing financing costs will remain important factors in strengthening the company’s financial performance.
Investors will likely monitor the company’s upcoming quarterly results to assess whether management can improve operational efficiency and return the business to a more sustainable financial position.
