Gharibwal Cement Posts Profit Growth Despite Margin Pressure in FY2026

Gharibwal Cement Limited (GCL) has reported a solid improvement in its bottom-line performance for the financial year ended June 30, 2026, with profit after taxation increasing to Rs2.345 billion, compared with Rs2.205 billion in the previous year. The company’s earnings per share also improved from Rs5.51 to Rs5.86 during the year.

According to the company’s financial statements, net sales revenue climbed to Rs22.313 billion in FY2026 from Rs19.687 billion a year earlier. This represents an increase of around 13.3%, reflecting stronger revenue generation during the year. However, the rise in sales was accompanied by higher production and other operating costs.

The company’s cost of sales increased to Rs18.103 billion, compared with Rs15.101 billion in FY2025. As a result, gross profit declined from Rs4.586 billion to Rs4.210 billion, indicating pressure on margins despite the improvement in revenue.

At the operating level, Gharibwal Cement recorded profit from operations of Rs3.127 billion, compared with Rs3.472 billion in the previous year. The decline was partly offset by stronger finance income and lower finance costs. Finance income rose to Rs466.955 million from Rs369.632 million, while finance cost fell significantly to Rs135.001 million from Rs252.193 million.

After accounting for levy and income tax, the company posted profit after taxation of Rs2.345 billion, up approximately 6.4% year-on-year. The improvement in net profit, despite lower operating profit, highlights the contribution of financial income and reduced finance costs to the final result.

Stronger Cash Position

Gharibwal Cement also ended the year with a substantially stronger cash position. Cash and cash equivalents increased to Rs2.307 billion at June 30, 2026, compared with Rs352.978 million at the end of FY2025.

The statement of cash flows shows that the company generated Rs4.769 billion in net cash from operating activities, compared with Rs2.969 billion in the preceding year. This improvement provides the company with greater financial flexibility to manage working-capital requirements and future investments.

At the same time, the company continued to invest in its operations, with Rs1.081 billion spent on property, plant and equipment during FY2026. Net cash outflow from investing activities stood at Rs2.593 billion, while financing activities resulted in a net outflow of Rs221.839 million.

No Final Dividend Announced

Despite reporting higher annual earnings, the board did not recommend a new cash dividend, bonus shares or right shares in its September 14 announcement. The company’s equity statement, however, shows an interim cash dividend of Rs1.00 per share for FY2026.

The board meeting was held on September 14, 2026, to consider the annual financial results. The company has proposed holding its Annual General Meeting on October 15, 2026, while the share transfer books are scheduled to remain closed from October 9 through October 15, 2026, inclusive.

Improved Overall Financial Position

Gharibwal Cement’s total assets increased to Rs41.481 billion at June 30, 2026, compared with Rs38.681 billion a year earlier. Equity stood at approximately Rs28.041 billion, while retained earnings increased to Rs16.331 billion.

Overall, FY2026 presented a mixed but encouraging picture for Gharibwal Cement. While higher costs squeezed gross and operating margins, increased sales, lower finance costs, stronger finance income and significantly improved operating cash generation helped the company deliver higher net earnings.

With a stronger cash balance and continued investment in property, plant and equipment, the company enters the new financial year with a comparatively healthier financial position. The upcoming annual general meeting will provide shareholders with an opportunity to review the company’s performance and financial outlook in greater detail.