Karachi: Fazal Cloth Mills Limited has reported a remarkable increase in profitability for the first quarter ended September 30, 2026. According to the company's directors' review, the net sales revenue rose to Rs. 25.21 billion, reflecting a growth of 3.60% from the previous year's corresponding period. This revenue increase was accompanied by a notable reduction in the cost of sales, which decreased by 1.84% to Rs. 22.13 billion. Consequently, the gross profit surged by 72.26%, amounting to Rs. 3.07 billion compared to Rs. 1.79 billion in the same period last year.
Operating expenses, including selling and administrative costs, amounted to Rs. 694.75 million, up from Rs. 415.92 million in the previous year. This increase was attributed to inflation and higher regulatory charges. Other income fell to Rs. 56.14 million from Rs. 454.10 million in the comparative period, largely due to the absence of dividends from an associate. Despite this, the operating profit grew by 33.63% to Rs. 2.44 billion.
A significant factor in the profitability boost was the substantial reduction in finance costs, which dropped by 67.14% to Rs. 399.15 million from Rs. 1.21 billion. This reduction was primarily due to the adjustment of mark-up support claims amounting to Rs. 827.731 million, credited by the State Bank of Pakistan under the Technology Up-Gradation Fund (TUF) Scheme.
Profit after taxation experienced an extraordinary growth of 759.41%, reaching Rs. 1.54 billion compared to Rs. 179.57 million in the same quarter last year. Earnings per share also increased significantly to Rs. 51.44, up from Rs. 5.99 in the corresponding period.
According to information available from the Pakistan Stock Exchange (PSX), the company's consolidated financial statements include results from its subsidiary, Fazal Gas Distribution Company Limited. Although the subsidiary has yet to start commercial operations, the Group reported a consolidated profit after tax of Rs. 1,543.24 million, with total assets amounting to Rs. 138.98 billion. The subsidiary's pre-operational expenses were minimal, amounting to Rs. 0.02 million, and had no material impact on the Group's results.