Verdict
Amtex Limited returned to profit in the year ended 30 June 2026 as sales grew, gross margin recovered sharply and annual finance cost eased. The improvement was real at the gross-profit level: revenue increased faster than cost of sales, and the company’s core operating subtotal moved back into positive territory before other income. However, the recovery has not repaired the balance sheet. Amtex still reported negative equity above Rs8 billion, overdue borrowings, a high-liquidity-risk warning and no unavailed credit line. FY26 therefore looks like an operational rebound inside a still-fragile capital structure, not a completed turnaround.
The audited consolidated accounts reported revenue of Rs3.07 billion, profit after tax of Rs134.5 million and earnings per share of Rs0.52, versus a Rs130.2 million loss and loss per share of Rs0.50 in FY25. No dividend was declared because the directors cited tight cash flow.
Results at a glance
- Reporting basis: audited consolidated financial statements for the year ended 30 June 2026; figures below are in Pakistani rupees unless stated otherwise.
- Revenue: Rs3.069 billion, up 29.5% from Rs2.371 billion.
- Gross profit: Rs322.5 million, up 142.5% from Rs133.0 million; gross margin widened to 10.5% from 5.6%.
- Profit after tax: Rs134.5 million, compared with a Rs130.2 million loss.
- Earnings per share: Rs0.52, compared with a loss per share of Rs0.50.
- Finance cost: Rs142.6 million, down 9.3% from Rs157.3 million.
- Dividend: none; management cited tight cash flow.
- AlphaGen model scores: Alpha QoQ Score 95.53; TTM Performance Score 100; 3Y Business Perf Score 59.96; Sector Leadership Score 84.3812. These are AlphaGen analytical model outputs, not figures reported by Amtex.
What improved
The strongest part of FY26 was the gross-profit bridge. Revenue rose by Rs698.6 million, or 29.5%, while cost of sales increased by Rs509.2 million, or 22.8%. That seven-percentage-point growth gap added roughly Rs189.5 million to gross profit and widened gross margin by about 4.9 percentage points. This matters because it shows the earnings recovery was not produced solely by other income or accounting remeasurement.
Operating expenses remained a drag, but they grew much more slowly than sales. Distribution expense increased 9.4% to Rs113.8 million and administrative expense rose 10.0% to Rs123.0 million. After distribution, administration and other expense, the calculated core operating subtotal was approximately Rs82.0 million, compared with a negative Rs86.3 million in FY25. This subtotal is an analytical calculation from the audited line items; it is not a separately reported management metric.
Annual finance cost also fell by Rs14.7 million to Rs142.6 million. The improvement helped the full-year result, although it should not be read as evidence that the financing problem has been solved. Amtex’s borrowings and overdue balances remained large relative to the scale of its operations.
The closing quarter carried much of the year’s earnings recovery. Subtracting the official nine-month results to 31 March 2026 from the audited full year gives estimated fourth-quarter revenue of Rs625.1 million and gross profit of Rs35.7 million, versus Rs546.8 million of revenue and a Rs46.1 million gross loss in the comparable FY25 quarter. On that common basis, fourth-quarter revenue rose about 14.3% and gross margin improved to 5.7% from negative 8.4%. The same bridge implies fourth-quarter profit after tax of about Rs124.5 million, compared with a Rs36.5 million loss.
Those quarterly figures are derived, not separately published. They reconcile an audited twelve-month statement with an official unaudited nine-month statement and should be interpreted with that limitation. The bridge is still useful: it indicates that the annual turnaround was not merely the carryover of a strong first nine months.
Cash-generation evidence is less complete. The official nine-month statement showed Rs139.7 million of net cash generated from operations through 31 March 2026, compared with Rs83.3 million used in the prior-year period. A reliably extractable full-year cash-flow statement was not available from the accessible documents, so no claim is made here about FY26 cash conversion or free cash flow.
Earnings quality: other income remains material
Reported profit from operations was Rs317.0 million, but other income contributed Rs235.0 million. The audited note indicates that this category included items such as investment-property fair-value movement, gains on asset disposal, loan fair-value recognition, rent and exchange effects. Because the accessible table extraction does not preserve every component amount reliably, this article does not assign a precise recurring-versus-non-recurring split.
The analytical implication is straightforward. The return to positive gross profit and the Rs168.3 million swing in the calculated core operating subtotal are encouraging and operationally relevant. At the same time, reported operating profit benefited substantially from income outside the main trading margin. Future results will be stronger in quality if gross profit and expense control can carry earnings with less support from revaluation, disposal or fair-value items.
Profit before minimum tax was Rs174.4 million, compared with a Rs94.6 million loss. Minimum tax of Rs38.4 million reduced reported profit before tax to Rs136.0 million, while the current and deferred tax charge was Rs1.5 million. The tax bridge is another reason to compare results on a consistent reported basis rather than mechanically applying a standard tax rate.
What weakened or needs attention
The balance sheet remains the central risk. Consolidated equity was negative Rs8.12 billion at June 2026, although this was less negative than Rs8.59 billion a year earlier. Current assets of Rs1.60 billion covered only about 27% of current liabilities of Rs6.04 billion. Net working capital was therefore negative by roughly Rs4.43 billion. Cash and bank balances were Rs119.7 million.
The apparent reduction in current liabilities needs context. Short-term borrowings fell to Rs1.80 billion from Rs5.04 billion, but the notes explain that about Rs3.24 billion was transferred or restructured into long-term financing. This improves maturity classification and the current ratio, but it is not equivalent to repaying the economic debt. Total debt remained approximately Rs7.02 billion, broadly unchanged from Rs7.07 billion.
The notes report overdue principal of about Rs510.8 million on long-term financing, Rs53.3 million on lease liabilities and Rs1.80 billion on short-term borrowings. Accrued interest or markup payable was approximately Rs2.60 billion. The company also disclosed that it had no unavailed credit facility and described liquidity risk as high. These conditions explain why even a profitable year did not support a dividend.
The directors’ report says the auditors drew attention to going-concern uncertainty, confirmation of bank and non-bank balances, deferred interest, unrecognized markup on borrowings and pending litigation. Management’s response points to debt restructuring, operating cash generation and possible asset sales. Those actions could improve liquidity, but they remain execution items rather than completed balance-sheet repair.
Financing pressure also reappeared late in the year. The audited annual finance cost minus the official nine-month figure implies fourth-quarter finance cost of about Rs68.7 million, compared with Rs45.8 million in the comparable quarter, an increase of roughly 50%. This derived comparison tempers the 9.3% decline in annual finance cost and makes the next two quarterly financing lines particularly important.
Business concentration is another constraint. Amtex describes itself as a vertically integrated textile business spanning value-added fabrics, made-ups, garments and yarn or fabric trading, yet it reports one operating segment. The annual report says three major customers generated about Rs1.13 billion of revenue, equivalent to roughly 36.7% of annual sales. Production capacity and utilization are not disclosed on a practicably measurable basis, limiting any independent volume-versus-price analysis.
Sector context
Pakistan’s textile environment remained mixed. The Pakistan Economic Survey 2025-26 reported textile and apparel exports of US$13.58 billion in July-March FY26, down 0.5% year on year, while total merchandise exports fell 8%. Within textiles, apparel export value increased 1.1% and bedwear rose 0.25%, while towels declined 2.1%. Amtex’s 29.5% revenue growth therefore outpaced the broad official export trend, but the filings do not disclose enough verified volume, price, product-mix or geographic detail to attribute the company-specific gain confidently.
Management says exports improved significantly and identifies demand, energy cost, interest rates, exchange rates, working capital and taxation as key industry variables. Those factors are plausible context, but the financial statements do not quantify how much each one contributed to FY26. The defensible conclusion is narrower: higher revenue, a slower increase in cost of sales and restrained overhead growth transmitted into a better gross and core operating result.
What to monitor next
- Gross-margin durability: a sustained margin near the FY26 full-year level would provide more convincing evidence of structural improvement than the 5.7% derived fourth-quarter margin alone.
- Cash conversion: the next audited or interim cash-flow statement should show whether accounting profit is converting into operating cash after working-capital movements.
- Debt restructuring execution: track the repayment schedule, overdue principal, accrued markup and whether reclassified borrowings are serviced rather than merely extended.
- Other-income dependence: separate recurring rental or exchange effects from disposal and fair-value gains, and compare the result with the calculated core operating subtotal.
- Customer concentration: growth is more resilient if it broadens beyond the three customers that generated more than one-third of FY26 sales.
- Liquidity and going concern: watch current assets relative to current liabilities, access to unused credit, asset-sale proceeds and any resolution of litigation or markup disputes.
Bottom line
Amtex’s FY26 result contains a credible operating improvement: sales expanded, gross margin almost doubled, overhead growth lagged revenue and the core operating subtotal turned positive. The derived fourth quarter also moved from gross loss to gross profit. That is meaningful progress.
The result is not yet financially comfortable. Other income remained an important contributor, quarterly finance cost appears to have risen late in the year, and the company still carries negative equity, overdue debt, weak current coverage and high liquidity risk. The next stage of the turnaround must be demonstrated in cash generation and debt service, not only in reported profit.
Sources and methodology
All company figures are taken from Amtex’s audited FY26 annual report and its official nine-month FY26 report. Percentage changes and quarterly bridges are reproducible calculations from those published statements. Where extraction did not preserve a reliable component split, the comparison was omitted rather than inferred. AlphaGen supplied internal cross-checks and the four explicitly identified model scores; it is not a public source for the reported financial figures.
- Amtex Limited — Annual Report 2026 (audited, issuer-hosted PDF)
- Amtex Limited — Nine-month report to 31 March 2026 (official PSX PDF)
- Pakistan Stock Exchange — Financial announcements
- Amtex Limited — Investor information
- Government of Pakistan — Pakistan Economic Survey 2025-26
- Pakistan Bureau of Statistics — External trade statistics