KARACHI: Nagina Cotton Mills Limited reported a decline in its third-quarter profitability for the period ended March 31, 2026, despite recording higher sales and an improvement in gross margins, reflecting the continued challenges faced by Pakistan’s textile sector.
According to the company’s latest financial results, quarterly net profit fell to Rs. 24.55 million, compared with Rs. 44.61 million in the corresponding period last year. Earnings per share (EPS) also declined to Rs. 1.31 from Rs. 2.39 a year earlier. The company attributed the lower earnings primarily to a higher turnover-based tax burden and compressed product margins.
Despite the earnings decline, Nagina Cotton Mills achieved 4.93% year-on-year growth in quarterly sales, with revenue increasing to Rs. 5.15 billion from Rs. 4.91 billion, driven mainly by higher sales volumes. The company also benefited from lower energy costs, helping reduce the cost of sales to 91.96% of revenue, compared with 92.29% in the same period last year. Consequently, the gross profit margin improved to 8.04%, up from 7.71%.
Operating expenses, however, increased alongside higher sales activity. Distribution costs rose to 1.70% of sales, while overall operating expenses reached 3.24% of revenue, compared with 2.74% in the corresponding period of the previous year.
On a positive note, the company successfully reduced its finance costs by 10.5%, bringing them down to Rs. 124.14 million during the quarter from Rs. 138.70 million a year earlier through disciplined financial management and a healthy liquidity position.
For the nine-month period ended March 31, 2026, Nagina Cotton Mills posted net profit of Rs. 80.14 million, slightly higher than Rs. 75.57 million recorded in the corresponding period last year. Revenue for the nine months remained largely stable at Rs. 15.44 billion, while earnings per share improved to Rs. 4.29 from Rs. 4.04.
Looking ahead, the company expressed cautious optimism regarding the final quarter of the financial year. Management noted that rising global cotton prices are supporting yarn prices, while government efforts to provide competitive energy tariffs could improve the competitiveness of Pakistan’s textile exports. The company is also expanding its renewable energy infrastructure by increasing its solar generation capacity from 4.45 MW to 5.40 MW, aiming to reduce energy costs and enhance long-term operational efficiency.
However, Nagina Cotton Mills cautioned that geopolitical uncertainty, inflationary pressures, and rising interest rates remain significant risks for the textile industry. The company emphasized the need for business-friendly government policies, including affordable energy, timely tax refunds, inflation control, and lower financing costs, to support sustainable growth in Pakistan’s textile sector.
