Kohat Textile Mills Limited (PSX: KOHTM), a yarn spinning company and part of the Saif Group, filed its results for the first quarter of its 2027 financial year (July to September 2026). The filing contains the financial statements only, without a directors’ review, so some changes are not explained.
The headline: a profit after tax of Rs 134.7 M, or Rs 6.48 a share, up 17.2% from Rs 114.9 M (Rs 5.52) a year earlier. That is the company’s strongest quarter in at least the last five, and almost half of its profit for the whole 2026 financial year (Rs 291.9 M, Rs 14.04 a share). The filing does not mention a dividend.
The quarter in numbers
| Rs M | Jul to Sep 2026 | Jul to Sep 2025 | Change |
|---|---|---|---|
| Sales | 2,216.5 | 2,004.4 | +10.6% |
| Cost of sales | (1,795.9) | (1,659.0) | +8.3% |
| Gross profit | 420.6 | 345.5 | +21.8% |
| Gross margin | 19.0% | 17.2% | |
| Distribution cost | (30.3) | (25.7) | +17.7% |
| Administrative expenses | (62.5) | (50.6) | +23.5% |
| Other income less other expenses | (9.4) | (8.5) | |
| Profit from operations | 318.4 | 260.6 | +22.2% |
| Finance cost | (141.9) | (106.9) | +32.7% |
| Minimum tax levies | (27.7) | (25.1) | +10.6% |
| Taxation | (14.1) | (13.8) | +2.8% |
| Profit after tax | 134.7 | 114.9 | +17.2% |
| Earnings per share, Rs | 6.48 | 5.52 | +17.4% |
What drove the result
Better sales and margins. Sales rose 10.6% while cost of sales rose only 8.3%, so the gross margin widened to 19.0% from 17.2% and gross profit rose 22%. The filing does not say whether this came from higher yarn prices, more volume or cheaper cotton and energy.
Overheads grew, but slower than gross profit. Distribution and administrative costs together rose 22% to Rs 93 M. Profit from operations still rose 22% to Rs 318 M.
Interest is the big cost. Finance cost rose 33% to Rs 142 M, almost half of operating profit. That held pre-tax profit growth to 15%. Tax and minimum levies were a modest Rs 42 M, so most of the pre-tax profit reached shareholders.
Cash and the balance sheet
- Heavy borrowing. Short-term borrowing was Rs 2.75 bn and long-term financing, including the current portion, Rs 1.23 bn: about Rs 3.98 bn in total, against cash of only Rs 32 M. That is more than twice the company’s market value.
- Working capital. Stock rose to Rs 1.43 bn and trade debts to Rs 2.67 bn, while payables fell by Rs 100 M. Operating cash flow was Rs 164 M, down from Rs 211 M, and the company borrowed a further Rs 105 M short term.
- Equity. Shareholders’ equity was Rs 5.01 bn, but Rs 2.96 bn of that is a revaluation surplus on property, plant and equipment. Excluding the surplus, equity is about Rs 2.05 bn.
- Capital spending fell to Rs 42 M from Rs 151 M a year earlier.
Valuation snapshot
At the 28 October close of Rs 89.41:
| Measure | Value |
|---|---|
| Earnings per share, last 12 months (October 2025 to September 2026) | about Rs 15.0 |
| Price to earnings | about 6.0 times |
| Book value per share, including the revaluation surplus | about Rs 241, so price to book of about 0.37 |
| Book value per share, excluding the surplus | about Rs 99, so price to book of about 0.9 |
| Market value (20.8 million shares) | about Rs 1.9 bn |
| Share price, last 52 weeks | low Rs 41.39, high Rs 191.51 |
The share has been very volatile. It traded around Rs 47 to Rs 60 for most of the past year, surged to Rs 191.51 in late June 2026 on heavy volume, and has since fallen back to about Rs 89, less than half the peak. It is a small company with only 20.8 million shares, and daily trading is usually thin, which can make moves sharp in both directions.
What to watch next
- Margins. Whether the 19% gross margin holds as cotton and energy costs change.
- Interest costs. With about Rs 4 bn of debt, finance cost takes almost half of operating profit; lower rates or less borrowing would help profit directly.
- Working capital. Stock and receivables tie up most of the borrowing.
- The rest of the year. Profit in the 2026 financial year fell sharply in the second half, to Rs 34 M in April to June, so one strong quarter does not settle the trend.
The bottom line
Kohat Textile Mills had a good first quarter: higher sales, a wider margin and a 17% rise in profit. The weak spot remains its debt, which pushed finance costs up by a third and takes almost half of operating profit. The share trades at about 6 times earnings after a sharp rise and fall this year.
You can follow KOHTM’s price, Pulse Score, results calendar and off-market trades in the Market Pulse Hub dashboard under PSX.
Bilal, Market Pulse Hub
Source: Kohat Textile Mills Limited, unaudited condensed interim financial statements for the quarter ended 30 September 2026. Earlier quarters from company filings. Prices from the PSX data portal. Twelve-month, per-share and valuation figures are our calculations. This article is for education and information only and is not investment advice.