KARACHI: Fazal Cloth Mills Limited has reported a profit after tax of Rs356 million for the nine months ended March 31, 2026, as the textile manufacturer navigated a challenging operating environment marked by pricing pressure and higher energy costs while continuing to invest in renewable energy and operational efficiency.
According to the company’s latest financial report, net revenue increased by 3.7% to Rs71.60 billion, compared with Rs69.03 billion in the corresponding period last year. The growth was primarily supported by improved sales volumes and stronger market penetration across both domestic and export markets. Local sales contributed Rs58.69 billion, with the remaining revenue generated from exports.
Despite higher revenue, the company’s gross profit declined to Rs5.72 billion from Rs5.87 billion a year earlier, while the gross profit margin narrowed to 7.99% from 8.50%. Management attributed the decline to lower yarn selling prices driven by increased market competition, which outweighed the benefits of lower raw material and energy costs.
Operating profit stood at Rs5.12 billion, compared with Rs5.50 billion in the same period last year. Finance costs, however, eased slightly to Rs3.89 billion, reflecting improved financial discipline, active debt management, and the benefit of a softer interest rate environment. Earnings per share (EPS) came in at Rs11.86, compared with Rs12.74 in the corresponding period of 2025.
The company continued its capital expenditure programme during the period, investing in modern spinning and weaving machinery and accelerating the installation of a 28-megawatt solar power project across its Muzaffargarh and Qadirpur Rawan facilities. The remaining portion of the project is expected to be completed by May 2026, with total planned solar generation capacity increasing to 51 MW, helping reduce electricity costs and improve long-term profitability.
Management noted that Pakistan’s textile sector remained under pressure due to lower yarn prices, elevated energy costs, and global geopolitical uncertainties affecting international trade. However, it highlighted encouraging signs of recovery in export demand from key markets, including the European Union and the United States.
Looking ahead, Fazal Cloth Mills said its strategy will focus on improving operational efficiency, expanding export markets, strengthening financial discipline, and investing in advanced manufacturing technology. The company expects profitability to gradually improve as energy savings from the solar project begin to materialize and market conditions stabilize.
The board has not announced any interim dividend for the nine-month period, stating that it intends to conserve financial resources to support ongoing capital expenditure, debt servicing, and working capital requirements.
