KARACHI: First Equity Modaraba (FEM) posted a strong financial turnaround during the first nine months of FY2026, reporting a net profit of Rs14.77 million for the period ended March 31, 2026, compared with a loss of Rs2.65 million recorded in the corresponding period last year.
The improved performance translated into earnings per certificate (EPC) of Rs0.28, reversing from a loss of Rs0.05 per certificate in the same period of FY2025. The Modaraba’s break-up value per certificate also strengthened to Rs11.73 as of March 31, 2026.
During the nine-month period, total income surged to Rs37.07 million, more than doubling from Rs15.53 million a year earlier. Despite operating expenses increasing to Rs21.30 million, the company generated an operating profit of Rs15.75 million, compared with an operating loss of Rs2.51 million in the same period last year.
The Modaraba’s balance sheet also reflected a stronger financial position. Total assets increased to Rs692.51 million as of March 31, 2026, from Rs665.20 million at the end of June 2025. Meanwhile, certificate holders’ equity rose to Rs614.93 million, supported by higher reserves and improved profitability. Cash and bank balances also climbed significantly to Rs49.75 million, highlighting improved liquidity.
In its directors’ report, management attributed the improved results partly to the reversal of previously recognized unrealized investment losses into unrealized gains. The company reiterated its long-term investment philosophy, stating that temporary declines in investment values are expected to recover over time as intrinsic values prevail.
Management also provided an update on Equity Textiles Limited, the Modaraba’s wholly owned subsidiary. It noted that while the sale of certain assets has already taken place, accounting treatment required temporary losses to be recognized before the completion of the overall transaction. The company expects these losses to convert into gains once the remaining asset sale process is finalized before the close of the current financial year.
Looking ahead, the directors acknowledged that ongoing geopolitical tensions, particularly the conflict in the Gulf region, along with political and economic uncertainty, have negatively affected Pakistan’s capital markets. However, they expressed optimism that market conditions would improve once these uncertainties subside, paving the way for a sustained recovery in investor confidence and stock market performance.
