Cherat Packaging Limited has reported a significant improvement in its financial performance for the first quarter of FY2026-27, posting a 29% increase in revenue and a substantial rise in net profit for the three-month period ended September 30, 2026.
According to the company’s unaudited financial results, net turnover increased to Rs. 4.36 billion, compared with Rs. 3.37 billion in the corresponding period last year. The company also recorded a net profit of Rs. 154.43 million, significantly higher than Rs. 16.16 million reported in the same quarter of FY2025-26.
Strong Improvement in Profitability
Cherat Packaging’s gross profit increased to Rs. 606.66 million from Rs. 234.95 million in the previous year’s corresponding quarter, reflecting a notable improvement in operating performance.
Operating profit also rose considerably to Rs. 431.98 million, compared with Rs. 105.63 million last year. Meanwhile, profit before levies and income tax reached Rs. 245.13 million, against Rs. 24.78 million in the same period last year.
Earnings per share (EPS) improved to Rs. 3.15, compared with Rs. 0.33 previously, highlighting the company’s stronger profitability during the quarter.
Rising Costs Remain a Challenge
Despite the improvement in financial results, the company continues to face challenges arising from higher energy costs, subdued domestic demand and geopolitical uncertainties.
According to management, regional conflicts, particularly in the Middle East, have disrupted international supply chains and affected the availability and pricing of key raw materials. Since the packaging industry relies heavily on imported polymer resins, rising procurement costs have placed pressure on operating margins.
Finance costs increased to Rs. 186.85 million from Rs. 80.84 million in the corresponding period last year. The increase was attributed to higher working capital requirements and the acquisition of new long-term financing.
Flexible Packaging Division Leads Revenue Contribution
The company’s segment-wise performance showed growth in both major business divisions.
The Flexible Packaging Division generated revenue of Rs. 2.81 billion during the quarter, compared with Rs. 2.19 billion last year. Its profit before minimum tax, income tax and unallocated expenses reached Rs. 276.45 million.
Meanwhile, the Bags Manufacturing Division recorded revenue of Rs. 1.55 billion, compared with Rs. 1.18 billion in the corresponding period last year. The division also improved its performance, reporting a segment profit of Rs. 59.83 million against a loss of Rs. 28.73 million previously.
These results demonstrate improved performance across both operating segments, with flexible packaging remaining the larger contributor to overall revenue.
Future Growth Plans and Strategic Investments
Looking ahead, Cherat Packaging plans to strengthen its market position through operational improvements, product diversification and strategic investments.
The company expects its Barrier Film Extrusion line and expansion of its Flexible Packaging and SOS and Carrier Bags divisions to create additional growth opportunities.
Management is also focusing on diversifying raw material sourcing, improving supply chain resilience, optimizing product mix and strengthening working capital management to reduce exposure to external economic pressures.
Outlook
Cherat Packaging’s first-quarter results reflect a strong recovery in revenue, operating profit and earnings despite a challenging business environment. The improvement in both operating divisions and the substantial increase in earnings per share provide positive indicators of its financial performance.
However, rising financing expenses, raw material costs and international supply chain uncertainties remain important factors to monitor.
The company’s ability to maintain cost discipline, execute its expansion plans and improve operational efficiency will be crucial in sustaining profitability and delivering consistent returns to shareholders in the coming quarters.
