Shahtaj Textile Limited Posts Rs43.71 Million Profit in First Quarter of FY2027

Shahtaj Textile Limited has reported a profit after taxation of Rs43.71 million for the first quarter ended September 30, 2026, compared with Rs57.31 million in the corresponding period last year, reflecting a decline of approximately 24%. The company disclosed its financial results in a notice submitted to the Pakistan Stock Exchange (PSX) on October 26, 2026.

According to the company’s unaudited financial statements, earnings per share (EPS) declined to Rs4.53 from Rs5.93 in the same quarter of the previous financial year.

Revenue and Gross Profit Decline

Shahtaj Textile’s net revenue decreased to Rs1.499 billion during the quarter under review, compared with Rs1.659 billion in the corresponding period last year. This represents a decline of approximately 9.6%.

The company’s cost of goods sold also declined to Rs1.321 billion from Rs1.464 billion. However, the reduction in costs was not sufficient to prevent gross profit from falling to Rs178.29 million, compared with Rs194.82 million a year earlier.

The decline in revenue and gross profit contributed to the lower earnings reported for the quarter.

Finance Costs Provide Some Relief

The company’s finance costs decreased to Rs33.42 million in the first quarter of FY2027 from Rs39.06 million in the same period last year. This reduction helped partially offset the impact of lower revenue and gross profit.

Distribution expenses increased to Rs30.80 million from Rs29.22 million, while administrative expenses rose to Rs48.83 million from Rs44.45 million. Other operating expenses, meanwhile, decreased to Rs5.24 million from Rs6.83 million.

Profit before levies and taxes stood at Rs62.67 million, compared with Rs78.29 million in the corresponding quarter last year. After accounting for levies of Rs18.96 million, profit before taxation and profit for the period both amounted to Rs43.71 million. No taxation expense was reported in the income statement for either comparative period.

Financial Position Remains Supported by Equity

Shahtaj Textile’s total assets stood at Rs4.576 billion as of September 30, 2026, slightly below Rs4.592 billion at the end of June 2026.

Total equity increased to Rs2.555 billion from Rs2.511 billion over the same period, supported by the profit generated during the quarter and changes in reserves.

On the liabilities side, short-term borrowings increased to Rs549.78 million from Rs407.26 million at June 30, 2026. Meanwhile, trade and other payables declined to Rs656.68 million from Rs884.37 million.

Cash and bank balances decreased to Rs13.65 million from Rs67.27 million at the end of the previous financial year, highlighting a reduction in the company’s available cash balance.

Operating Cash Flow Remains Under Pressure

The company’s cash flow statement showed net cash used in operating activities of Rs189.32 million during the quarter, compared with Rs75.62 million in the same period last year.

The cash outflow reflected movements in working capital, including an increase in trade debts and a reduction in trade and other payables. These movements contributed to pressure on operating cash flows despite the company remaining profitable.

Net cash generated from investing activities amounted to Rs1.78 million, while financing activities generated Rs5.35 million. Overall, the company reported a net decrease of Rs182.20 million in cash and cash equivalents during the quarter.

No Dividend Announced

The board of directors, at its meeting held on October 26, 2026, did not recommend any cash dividend or other benefit for shareholders for the quarter ended September 30, 2026.

The company stated that its quarterly report would be submitted separately through the Pakistan Unified Corporate Actions Reporting System (PUCARS) within the prescribed timeframe.

Outlook

Shahtaj Textile’s first-quarter results reflect a challenging period, with lower revenue and gross profit translating into reduced earnings. Although declining finance costs provided some relief, the fall in profitability and negative operating cash flow remain important areas for investors to monitor.

Future performance will depend on the company’s ability to improve sales, manage operating expenses, maintain effective working-capital management and strengthen cash generation. Investors will be watching subsequent quarterly results for signs of a recovery in revenue, profitability and liquidity.