Macpac Films 1HFY26 Profit Falls 55% to Rs5 Million Despite Higher Sales

Macpac Films, a maker of plastic packaging films used by food and consumer goods companies, reported a steep fall in first half profit. The drop is striking because it happened even as sales grew and gross profit improved sharply, with the damage done lower down the income statement.

What the 1HFY26 results showed

Macpac Films reported profit after tax of Rs5.38 million for the six months ended December 2025, down about 55 percent from Rs11.87 million a year earlier. Earnings per share fell to Rs0.09 from Rs0.20. The operating picture actually got better, which makes the profit drop a tale of costs rather than weak demand.

Net sales rose about 4.6 percent and gross profit jumped about 32 percent, so the core business sold more at better margins. The hit came from below. Levy charges rose to Rs29.54 million from a tiny Rs0.13 million a year earlier, a large new drag. Finance costs rose about 38 percent, administrative expenses climbed, and other operating expenses surged. Together those costs swallowed the gross profit gains and cut the bottom line by more than half.

Why it matters for packaging stocks

Film makers like Macpac supply flexible packaging to food, beverage and consumer companies, so their volumes follow packaged goods demand. The big input costs are imported polymer resins and energy, and the businesses tend to carry debt, which makes finance costs an important swing factor. A result like this shows how a one off levy charge and higher borrowing costs can override a genuinely better operating performance. The encouraging part is that the gross margin improvement suggests the underlying business is healthier than the headline profit implies.

Which stocks, and why

This is a direct, company specific result for Macpac Films, and the headline read is negative because profit more than halved. The direction is negative on the bottom line, tempered by a clear improvement in gross profit. The influence is low because the absolute profit is small in rupee terms and the main culprit, the jump in levy charges, looks like a one time item rather than a permanent shift. The longevity is short for the same reason, since the levy drag and elevated finance costs may not repeat at the same scale.

What to watch

Track whether the levy charge recurs in the next results, what happens to finance costs as debt and interest rates move, and whether the stronger gross margin holds. The key question is whether the improved operating performance can flow through to the bottom line once the unusual costs ease.