Khyber Tobacco Swings to Profit in 1QFY26 as Exports Jump Over 300%
Khyber Tobacco posted a net profit of Rs36.97 million in 1QFY26, a sharp turnaround from a Rs813 million loss a year earlier, driven by a more than threefold rise in export sales and a recovery in gross margins.
A small Pakistani cigarette and tobacco maker has turned its results around on the back of exports. Khyber Tobacco Company reported a net profit of Rs36.97 million for the first quarter of its 2026 fiscal year, against a net loss of Rs813.03 million in the same quarter a year before. The swing was driven by a surge in export sales and a recovery in margins after a difficult prior year.
What the 1QFY26 results showed
Earnings per share came in at Rs5.34, compared with a loss per share of Rs117.45 in 1QFY25, with a net profit margin of 2.34 percent. Net sales rose 27.21 percent to Rs1,581.64 million. The most striking part was exports. Export sales jumped 315.13 percent to Rs1,206.118 million and made up 40.16 percent of gross turnover, up from just 6.23 percent a year earlier. Helped by a changed sales mix, better pricing and tighter cost control, the company recorded a gross profit of Rs263.46 million, reversing a gross loss of Rs341.45 million in the same quarter last year. Gross margin (the share of sales left after the direct cost of making the product) moved from deeply negative to positive.
Why it matters for a tobacco stock
For a small national tobacco company, the heavy lean on exports is the headline. Selling abroad cushions a business against domestic pressures such as high federal excise duty on cigarettes and the squeeze on local cigarette volumes that the documented tobacco sector has faced. Khyber Tobacco has also pushed into re-dried tobacco and built out distribution into markets across Eastern Europe, Africa, Asia and the Middle East. A turnaround this large in a single quarter shows how much the mix shift toward exports and re-dried leaf can move a company of this size. The flip side is that export demand and pricing can be volatile, and a single quarter does not by itself prove the recovery is durable.
Which stocks, and why
This is a direct, company specific result for Khyber Tobacco Company, and the read is clearly positive. Moving from a Rs813 million loss to a Rs36.97 million profit, with gross margin flipping from negative to positive and exports more than quadrupling, is a high impact operating result for a business this size. The influence is high because the change is central to the company's earnings, not a passing ripple, and the shift toward exports and re-dried tobacco looks structural rather than one-off.
What to watch
The key things to track are whether export sales hold near these levels in the following quarters or fall back, since they now drive the bottom line. Watch the durability of the gross margin recovery, the domestic excise duty environment for cigarettes, and any update on local volumes as the track and trace system on tobacco products is fully enforced. Sustained export momentum alongside steady local sales would confirm the read, while a drop back in exports would call it into question.
Frequently asked questions
How did Khyber Tobacco perform in 1QFY26?
It posted a net profit of Rs36.97 million with earnings per share of Rs5.34, a turnaround from a net loss of Rs813.03 million and a loss per share of Rs117.45 in the same quarter a year earlier. Net sales rose 27.21 percent to Rs1,581.64 million.
What drove the turnaround?
Export sales jumped 315.13 percent to Rs1,206.118 million and made up about 40 percent of gross turnover, up from roughly 6 percent a year earlier. A better sales mix, pricing and cost control turned a gross loss into a gross profit of Rs263.46 million.
Is the result positive for KHTC stock?
Swinging from a large loss to a profit on the back of strong exports is a clearly positive operating result. This describes the company's performance and exposure, not a forecast for its share price.
Informational only — not investment advice. Sentiment reflects news exposure, not a buy/sell recommendation or price forecast. Do your own research and consult a licensed professional.
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