Cherat Packaging Reports Strong FY2026 Performance, Expands Flexible Packaging Capacity
Cherat Packaging Limited (CPL) delivered a significant improvement in financial performance during the financial year ended June 30, 2026, despite facing inflationary pressures, supply-chain disruptions and an uncertain demand environment.
According to the company’s Annual Report 2026, net sales increased to Rs. 15.09 billion, compared with Rs. 13.01 billion in the previous year, representing growth of approximately 16%. The improvement was primarily driven by higher volumes from the Flexible Packaging Division.
Profitability Shows Strong Improvement
Cherat Packaging recorded a gross profit of Rs. 1.88 billion, up substantially from Rs. 1.02 billion in 2025. Net profit also increased to Rs. 651 million, compared with Rs. 356 million a year earlier. Earnings per share stood at Rs. 13.26 for the year.
The company said improved margins, cost management, operational efficiencies and a stronger contribution from its Flexible Packaging Division helped offset higher raw-material and fuel costs. Actual net profit also exceeded the company’s budget of Rs. 362 million by approximately 80%.
A further contribution to profitability came from a Rs. 189 million one-off gain arising from the remeasurement of the Sindh Infrastructure Development Cess liability. The company also benefited from lower finance costs following a decline in discount rates.
Flexible Packaging Emerges as a Key Growth Driver
The Flexible Packaging Division continued to gain importance within CPL’s overall business. Its turnover increased from Rs. 7.3 billion in 2025 to Rs. 9.3 billion in 2026, while its contribution to total sales rose to 62%.
The division’s production has followed an upward trajectory since its launch in 2018, with production growing at an approximate 31% compound annual growth rate over the last seven years, according to the annual report.
CPL has also continued diversifying its product portfolio. In June 2026, the company commissioned its second extrusion facility, a Barrier Film Extrusion Line II, with allied equipment. The project increases production capacity, supports resource utilization and is intended to help the company enter additional packaging markets.
Investment in New Capacity and Renewable Energy
The company’s expansion program extended beyond flexible packaging. CPL also installed 2.7 MW of solar panels at its factory during the year. Both the extrusion project and solar installation were financed through long-term loans, resulting in higher capital-structure ratios.
The company had previously commissioned its SOS/Carrier Bag Plant in 2025. The new facility has enabled CPL to access additional packaging markets, improve resource utilization and increase sales volumes.
Navigating Supply-Chain and Economic Challenges
The year was not without challenges. CPL reported disruptions to global supply chains and higher freight, insurance and raw-material costs. The company’s packaging operations rely on imported polymer resins and other petrochemical-based materials, leaving the business exposed to international commodity prices and transportation disruptions.
Despite these pressures, the company reported that effective cost control, operational efficiency and customer-focused strategies helped it maintain growth. Net sales of Rs. 15.09 billion were slightly below the budget of Rs. 15.47 billion, but gross and net profits exceeded budget expectations.
Outlook for FY2027
Looking ahead, Cherat Packaging expects Pakistan’s economic environment to show gradual improvement, supported by easing inflation, stable interest rates and recovering activity across key sectors. However, the company continues to recognize geopolitical uncertainty, raw-material availability, freight costs and commodity-price volatility as important risks for the packaging industry.
The Bags Manufacturing Division is expected to remain exposed to slower cement dispatches and increasing competition in polypropylene bags. At the same time, the SOS/Carrier Bags operation is expected to contribute further as the facility matures.
For the Flexible Packaging Division, the newly commissioned second extrusion line is expected to broaden the product portfolio, increase capacity and support entry into new market segments.
A Business Increasingly Focused on Diversification
Cherat Packaging’s FY2026 results highlight the growing importance of diversification in its business strategy. While the company retains its established position in cement packaging, its Flexible Packaging Division is becoming a larger contributor to revenue and provides access to markets including food, FMCG and other consumer-oriented sectors.
The Annual Report 2026 therefore presents a business balancing expansion with operational efficiency, investment in new technology and sustainability initiatives. With additional flexible-packaging capacity now in place, CPL is positioned to pursue new market opportunities while continuing to manage the economic and supply-chain challenges facing the industry.
