Sardar Chemical Industries Limited recorded a mixed financial performance for the year ended June 30, 2026, with stronger operating results and cash generation offset by a decline in profit after tax. The company’s latest financial statements show that while sales remained broadly stable, improved cost management helped lift gross and operating profits during the year.
According to the financial statements, net sales stood at Rs528.55 million in FY2026, compared with Rs533.86 million in the previous year. Despite the modest decline in revenue, the company’s gross profit increased to Rs167.58 million from Rs148.40 million, reflecting an improvement in the relationship between sales and the cost of goods sold.
Operating Profit Shows Strong Improvement
The improvement at the gross-profit level also translated into stronger operating performance. Sardar Chemical Industries reported operating profit of Rs77.37 million in FY2026, compared with Rs65.79 million in FY2025.
Administrative expenses increased to approximately Rs66.01 million, while selling and distribution costs rose to around Rs24.19 million. Even with these higher expenses, the company was able to generate a higher operating profit, highlighting the contribution of improved gross profitability.
Financial charges also declined significantly, falling to Rs7.27 million from Rs12.48 million a year earlier. This reduction provided additional support to the company’s profitability before taxation.
Profit After Tax Declines
Despite the improvement in operating profit, Sardar Chemical Industries reported profit after income tax of Rs37.96 million, down from Rs45.60 million in FY2025.
The financial statements show that the company’s profit before tax increased to Rs70.32 million from Rs53.45 million. However, income tax expense rose sharply to Rs32.36 million, compared with Rs7.85 million in the previous year. The higher tax charge therefore had a significant impact on the final earnings reported for the year.
As a result, basic and diluted earnings per share declined to Rs6.33 from Rs7.60.
Balance Sheet Remains Strong
The company’s total assets increased to approximately Rs508.16 million as of June 30, 2026, compared with Rs466.97 million a year earlier.
Non-current assets stood at Rs93.08 million, while current assets increased to approximately Rs415.19 million. Within current assets, stock-in-trade rose to Rs134.85 million, while trade debts stood at approximately Rs240.64 million. Cash and bank balances also increased to Rs23.37 million from Rs22.03 million.
On the equity side, accumulated profits increased to Rs283.71 million, compared with Rs254.75 million at the end of FY2025. Total equity and reserves reached approximately Rs373.71 million.
Cash Generation Improves
Cash flow remained another positive aspect of the company’s FY2026 performance. Cash generated from operations increased to Rs49.74 million from Rs45.06 million in the previous year.
After finance charges, workers’ participation fund payments and income tax, net cash generated from operating activities amounted to Rs22.28 million, compared with Rs19.72 million in FY2025.
The company invested in property, plant and equipment during the year, with purchases amounting to approximately Rs14.86 million. As a result, net cash used in investing activities stood at Rs13.07 million.
Financing activities resulted in a net cash outflow of approximately Rs7.86 million, including dividend payments and repayments of financial obligations. Nevertheless, the company ended the year with cash and cash equivalents of Rs23.37 million.
Dividend and Retained Earnings
The statement of changes in equity shows that Sardar Chemical Industries declared a final dividend of Rs9.00 million for FY2026, compared with Rs5.22 million for FY2025.
Following the year’s profit and dividend distribution, accumulated profits increased to Rs283.71 million by June 30, 2026. Total equity rose to approximately Rs373.71 million, compared with Rs344.75 million a year earlier.
Overall Financial Picture
Sardar Chemical Industries’ FY2026 results present a combination of stronger operating fundamentals and lower bottom-line earnings. Revenue was slightly lower, but the company achieved a significant improvement in gross profit and operating profit, while financial charges were substantially reduced.
The main factor weighing on net earnings was the considerably higher income tax expense. At the same time, operating cash generation improved and shareholders’ equity continued to grow.
The company’s financial statements therefore point to improved operating profitability and cash generation during FY2026, alongside a decline in reported profit after tax and earnings per share.
