Ahmad Hassan Textile Mills 1HFY26 Margins Rise on Lower Power Tariff Despite Sales Drop

Ahmad Hassan Textile Mills, a Multan area textile composite that spins yarn and weaves fabric, delivered a mixed first half of FY26. The top line shrank as exports fell, but a cheaper power bill and tighter operations pushed the gross margin up, a useful reminder that for a mill the cost of energy can matter as much as the level of sales.

What the 1HFY26 results showed

Ahmad Hassan Textile Mills reported net sales of Rs2,459.44 million for the six months to December 2025, down 19.31 percent year on year. The company linked the fall to a sharp drop in fabric exports during the period, driven by rising global competition and weaker overseas demand. Even so, the gross profit margin rose to 8 percent in 1HFY26 from 7 percent in 1HFY25. Gross margin is the share of each sales rupee left after the direct cost of making the cloth, so an improvement here while sales fall is unusual and points to lower input costs.

Why it matters for textile stocks

The margin gain came largely from energy. The industrial electricity tariff was cut by Rs4.04 per unit, and wheeling charges, the fee paid to move power across the grid from one site to another, fell to below Rs9 per unit. For a mill that runs energy hungry spinning and weaving lines, a few rupees off each unit of electricity flows straight to the cost of goods sold and lifts the margin.

This is one of the clearer examples this year of policy on power tariffs helping a textile name. The flip side is that demand remains the swing factor. Cheaper power cannot fully offset a fifth of sales disappearing, and a sustained drop in exports would eventually weigh on the whole income statement, not just the margin line.

Which stocks, and why

This is a direct result for Ahmad Hassan Textile Mills, and the read is neutral to mixed. A 19 percent sales decline is a real negative, but the margin moving the right way on cheaper energy and tighter costs is a genuine positive that keeps the result from being clearly bad. The influence is medium because the energy tariff cut is a sustained help to the cost base, while the export weakness is the offsetting pressure on the top line.

What to watch

The signals to track are whether fabric export orders stabilise in the second half, whether the lower power tariff and wheeling charges hold, and how the company's full half year profit, not just the gross margin, comes through once finance and other costs are counted. Watch global competition in fabric, since that was the named driver of the sales drop.