Karachi: Gul Ahmed Textile Mills Limited has reported a significant decline in profit for the fiscal year 2025/26, marked by a sharp decrease in both revenue and profit after taxation. According to the company's corporate briefing session held for FY 2025/26 and the first quarter of FY 2026/27, the financial landscape paints a challenging picture for the textile giant.
The company's revenue from contracts with customers fell to 131.09 billion rupees from 157.90 billion rupees in the previous year, representing a very large or significant move of -17.0%. The cost of sales also decreased to 121.52 billion rupees from 138.93 billion rupees, a big move of -12.5%, yet it was insufficient to prevent the contraction in gross profit, which plummeted by 49.6% to 9.57 billion rupees.
Operating profit saw a steep decline, plummeting by 78.3% to 2.30 billion rupees. Despite an increase in other income by 71.7%, finance costs remained high at 4.31 billion rupees, albeit reduced by 29.1%. Consequently, the loss before taxation was recorded at 1.44 billion rupees, a reversal from the 3.97 billion rupee profit in the prior year. Taxation adjustments provided some relief with a 910.5% increase in tax credits, yet the profit after taxation ended at a loss of 922.60 million rupees.
According to information available from the Pakistan Stock Exchange (PSX), the gross profit margin declined to 7.30% from 12.02%, and the operating profit margin dropped from 6.72% to 1.76%. The net profit margin also turned negative, reflecting the company's financial strains.
In the first quarter of FY 2026/27, Gul Ahmed reported revenue of 33.73 billion rupees, down from 40.58 billion rupees, marking a big move of -16.9%. The cost of sales decreased by 17.6% to 30.15 billion rupees, but gross profit also declined by 9.8% to 3.58 billion rupees. Profit before taxation increased by 93.9% to 597.02 million rupees, and profit after taxation surged by 116.1% to 505.92 million rupees, indicating a modest recovery.
On the balance sheet, total assets stood at 133.45 billion rupees, a decrease of 11.7% from the previous year. Non-current assets increased by 7.1%, while current assets saw a decline of 22.3%. Total equity and liabilities were reported at 133.45 billion rupees, matching the total asset decline. The company's reserves fell by 2.2% to 40.53 billion rupees, and long-term financing decreased by 9.8% to 14.55 billion rupees.
The company's management highlighted efforts to streamline operations and reduce costs amid an increasingly competitive market environment. The textile sector continues to face economic headwinds, including fluctuating demand and rising costs, posing challenges for sustained growth and profitability.