Pakistan Textile 1HFY26: Nishat Mills Profit Falls 19%, Gul Ahmed Nearly Wiped Out

Pakistan's textile composites, the large exporters that spin, weave and stitch, had a difficult first half of FY26. Two of the biggest listed names showed it plainly. Nishat Mills saw profit fall nearly a fifth, and Gul Ahmed's profit was all but wiped out. The pressures were the familiar ones for the sector: high energy costs, a local cotton shortage, and soft demand.

What the textile results showed

Nishat Mills, one of the largest composite textile makers, posted net profit of Rs3.35 billion for the half year ended 31 December 2025, down 19.22 percent year on year, with earnings per share of Rs9.52 against Rs11.78. Revenue dipped 2.79 percent to Rs86.93 billion. The bigger hit was to margins: gross profit fell 15.59 percent and the gross margin slipped to 10.24 percent from 11.80 percent, which the company linked to higher energy tariffs and the need to import cotton because of a shortage in the local crop.

Gul Ahmed had a much sharper fall. Net profit collapsed 95 percent to Rs50.7 million from Rs1.02 billion a year earlier, on revenue down 9.63 percent to Rs85.49 billion. Administration costs rose, operating profit fell 39 percent, and the company actually posted a pre-tax loss of about Rs199 million, ending in a small net profit only because of a tax credit. That is a weak result by any reading.

Why the squeeze matters for textile stocks

Textile exporters earn in foreign currency but carry heavy local costs, especially energy. When power and gas tariffs rise, their margins compress directly, because energy is a big part of the cost of spinning and processing. A shortage in the local cotton crop makes it worse, forcing mills to buy pricier imported cotton. Add soft global demand and the result is thinner margins across the sector. A weaker rupee can help, by lifting the local value of dollar sales, but it does not fully offset higher input and energy costs.

Which stocks, and why

Both names are negative on these results. Nishat Mills is the more resilient of the two, still solidly profitable but with profit down 19 percent and margins squeezed. Gul Ahmed is the weaker, with profit down 95 percent and an operating performance that slipped into a pre-tax loss. The common thread, energy costs and cotton, points to a sector wide squeeze rather than a company specific stumble, which is why both are marked negative.

What to watch

The signals to track are energy and gas tariffs, the size and price of the local cotton crop, and global apparel demand, especially from the United States and Europe. The rupee matters too, since a weaker rupee supports export receipts. Watch whether energy costs ease and whether the next cotton crop relieves the shortage, because those are the levers that would let textile margins recover.