Pakistan’s Top 20 Textile Firms Post Rs52 Billion Profit in FY26

Profits of Pakistan’s top 20 listed textile companies rose 11 per cent year-on-year to Rs51.9 billion in fiscal year 2026, according to Topline Securities, even though their combined sales barely moved. The rise in Pakistan textile profits came not from selling more, but from paying less: lower finance costs and a lighter effective tax rate did the heavy lifting.

The 20 companies generated combined sales of Rs1.4 trillion, equivalent to around $5 billion, largely unchanged from the previous year. Together they account for 83 per cent of the total market capitalisation of the listed textile sector, making the sample a fair proxy for the industry’s listed segment.

Pakistan Textile Profits: What Drove the 11% Rise

Two factors explain the jump. First, the effective tax rate of the companies fell to 33.2 per cent in FY26 from 37.1 per cent a year earlier, mainly because of reversals of deferred tax liabilities following changes in the future super tax treatment of exporters. Second, finance costs declined 19 per cent year-on-year to Rs54.5 billion, which Topline attributed primarily to lower financing rates and reduced borrowings under the Export Finance Scheme.

Gross margins held stable at 13.1 per cent, while gross profit and sales slipped 0.2 per cent and 0.3 per cent respectively. In plain terms: the industry earned more because its costs of money and tax fell, not because it sold more cloth.

The Big Three: Interloop, Sapphire and Nishat

Interloop, Sapphire Textile Mills and Nishat Mills were the three largest contributors to the listed sector’s profits, collectively accounting for 48 per cent of total earnings.

Interloop’s consolidated profit rose 129 per cent to Rs12.7 billion, supported by improved gross margins, lower finance costs and a sharp increase in other income. Its sales grew 5 per cent to Rs187.7 billion.

Sapphire Textile Mills’ unconsolidated profit increased 73 per cent to Rs6.8 billion, despite a 13 per cent decline in sales to Rs81.2 billion. The improvement was driven primarily by higher other income, lower finance costs and a reduced effective tax rate.

In contrast, Nishat Mills’ unconsolidated profit fell 9 per cent to Rs5.5 billion, mainly due to lower dividend income and a contraction in gross margins. Its sales increased 2 per cent to Rs181.6 billion.

Record Exports Behind the Numbers

Pakistan’s textile exports reached a record $17.6 billion in FY26, up 2 per cent year-on-year, accounting for 57 per cent of the country’s total goods exports. Value-added textile exports increased 3 per cent to $13 billion. The export engine kept running even as domestic listed sales stalled, which explains part of the resilience.

The numbers also connect to the trade-data cleanup now under way. The FBR’s reconciliation of the Pakistan-China trade data gap includes revised customs valuation rulings for yarn and fabrics, the very inputs these companies buy. Fairer valuations at ports feed directly into their cost base, and faster cargo clearance at Karachi Port cuts the time export consignments spend waiting.

Outlook: Cheaper Money, Costlier Energy

Looking ahead, Topline expects measures announced in the FY27 budget and lower financing costs to support textile sector profitability. Companies are also shifting towards renewable energy and other lower-cost energy sources to manage energy expenses and stay competitive.

But risks remain. High energy costs are still the key near-term challenge. Uncertainty over Pakistan’s GSP+ status and a possible slowdown in major developed economies, including the United States and European countries, could hurt demand. With Pakistan now chairing the G-24 group of developing nations, trade access for exporters like these will sit high on the economic agenda, even as market sentiment stays fragile after the K-P emergency rattled investors.

FAQs

How much profit did Pakistan’s top textile firms make in FY26?

The top 20 listed textile companies made a combined Rs51.9 billion in FY26, up 11 per cent from the previous year, according to Topline Securities.

Why did profits rise if sales were flat?

Lower finance costs, down 19 per cent to Rs54.5 billion, and a lower effective tax rate of 33.2 per cent drove the increase. Gross margins stayed stable at 13.1 per cent while sales slipped 0.3 per cent.

Which companies earned the most?

Interloop led with Rs12.7 billion in profit, up 129 per cent, followed by Sapphire Textile Mills at Rs6.8 billion and Nishat Mills at Rs5.5 billion. The three together made up 48 per cent of the sector’s earnings.