Karachi: Gul Ahmed Textile Mills Limited has reported a notable financial turnaround for the first quarter ending September 30, 2026, as per the company's directors' report dated October 29, 2026. The company's performance comes amidst a global economic landscape marked by challenges such as the Middle East conflict and subdued demand in key markets like the Euro Area.
During the first quarter of the fiscal year 2026-27, Pakistan's economy faced significant inflationary pressures, with prices rising above 10%. The textile sector, however, managed to post a 5% increase in exports, reaching USD 5.0 billion, driven primarily by readymade garments and cotton yarn, according to industry metrics.
Gul Ahmed's financial performance for the quarter showed a substantial improvement. The company reported a profit after taxation of Rs 505.9 million, a 116% increase from the Rs 234.1 million recorded in the same period last year. This marks a significant turnaround from the previous quarter's loss of Rs 579.5 million, reflecting a swing of nearly Rs 1.09 billion.
According to information available from the Pakistan Stock Exchange (PSX), Gul Ahmed's sales (net) decreased by 17% in rupee terms, attributed to a deliberate strategy to prioritize margins over volume. Direct export sales saw a decline of 28% in PKR terms, while indirect exports and local sales increased by 4% and 38%, respectively. The company's focus on higher-margin product lines and efficiency programs across its value chain have contributed to this financial rebound.
The cost of sales decreased by 18%, supported by a reduction in sales and improved gross margins, which rose to 10.62% from 9.78% in the same period last year. This was achieved despite persistent cost pressures, including rising fiber costs and increased labor expenses due to a minimum wage revision.
Gul Ahmed is also advancing its renewable energy initiatives, with significant investments in solar and wind energy projects at its Landhi and Nooriabad facilities. These projects are expected to bolster the company's decarbonization efforts and improve its margin profile through capacity investments in higher-margin product categories.
The company has successfully lowered its finance costs by 18% through deleveraging and shifting to cheaper funding lines. This financial strategy aligns with the firm's overarching transformation plan, which has begun to yield tangible benefits.
Gul Ahmed's performance in the first quarter reflects its resilience and strategic foresight in navigating a challenging economic environment. The company's continued focus on innovation, efficiency, and sustainable practices positions it well for future growth.