Nishat Chunian’s Profit Soars Amid Expanded Margins and Reduced Costs

Lahore: Nishat Chunian Ltd. (NCL) has reported a significant increase in its financial performance for the first quarter of fiscal year 2026. The company announced earnings of PkR522 million, with earnings per share (EPS) of PkR2.18, a substantial rise from the PkR35 million (EPS: PkR0.15) recorded in the same period last year. This 15-fold year-on-year increase in profitability is attributed to expanded gross margins and a reduction in finance costs, aligning with market expectations.

Despite a 2% year-on-year decline in overall revenue to PkR22.9 billion, compared to PkR23.3 billion in the previous year, the company saw a significant boost in its export sales. Exports increased by 23% to PkR11.1 billion, or approximately US$39.4 million, up from PkR9.1 billion (US$32.6 million) in the same period last year.

The gross margin improved to 11.3%, up from 9.2% in the corresponding period of the previous year. This improvement is largely due to the reduced costs of cotton and energy. Operating expenses remained stable year-over-year, as a decline in distribution costs, resulting from changes in export destinations, balanced out an increase in administrative expenses.

A notable reduction in finance costs was observed, with a decrease of 18% to PkR1.2 billion, down from PkR1.5 billion in the same period last year. This decline was supported by easing interest rates. Additionally, the effective tax rate stood at 35%, a decrease from the previous year’s 89%, due to the implementation of the minimum turnover tax amid lower profitability in the prior period.

AKD Securities Limited has reaffirmed its ‘Buy’ stance on NCL, citing expectations of improved export performance, favorable input prices, and reduced finance costs due to declining interest rates. The firm has set a target price of PkR68 per share for June 2026.