Interloop and Nishat Chunian drove a sharp earnings recovery, showing how higher capacity utilisation and lower financing costs can materially improve textile profitability even when sector-wide export growth remains weak.
Combined net profit at Interloop, Nishat Mills and Nishat Chunian increased 66% year on year to Rs20.2 billion in FY2025/26, from Rs12.2 billion, according to AKD Research. Combined revenue rose a much smaller 3% to Rs451.3 billion, highlighting that margin recovery rather than top-line expansion produced most of the earnings improvement.
Exports outperform domestic sales
The three companies increased exports 7% to $1.1 billion, supported by hosiery, denim, apparel and workwear, while domestic sales declined 5% to Rs138.9 billion. Their combined gross profit increased 10% to Rs70.3 billion, lifting gross margin to 15.6% from 14.7%.
AKD attributed part of the improvement to higher utilisation of newly installed capacity, which reduced initial operating losses. Falling export prices partly offset those gains.
Financing provided another major tailwind. Combined finance costs fell 23% to Rs17.5 billion, from Rs22.8 billion, as borrowing requirements and financing rates eased. The effective tax rate also declined to 33% from 43%.
Interloop leads the recovery
Interloop delivered the strongest turnaround: profit after tax reached Rs13.15 billion, more than double Rs5.38 billion in FY25, while EPS rose to Rs9.38 from Rs3.84. Sales increased 5.5% to Rs182.8 billion and gross margin improved to 23.0%.
Nishat Chunian more than doubled profit to Rs1.60 billion, with EPS rising to Rs6.66. Its gross margin increased to 12.2% from 10.3%.
Nishat Mills, by contrast, recorded a 9% decline in EPS to Rs15.59, reflecting weaker margins and lower dividend income.
Competitiveness takeaway
The results suggest Pakistan’s fastest route to stronger textile profitability is not simply higher export volumes. Capacity utilisation, value-added product mix, productivity, working-capital discipline and lower financing costs can generate substantial earnings leverage.
But the improvement is concentrated. Pakistan’s value-added textile exports increased only around 1% to $15.5 billion in FY26, meaning sustained industry-wide recovery will require stronger demand alongside operational efficiency.
