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GOC (Pak) FY2026: Profit Doubles as Cost Discipline Outruns Sales Growth

GOC returned to revenue growth and doubled PAT in FY2026, helped by a much lower operating-expense burden, but cash conversion weakened as inventory climbed.

Sep 19, 2026

Company Name: GOC (Pak) Limited

Ticker: GOC

Reporting period: year ended 30 June 2026. Primary analytical basis: the company-level annual financial statements filed with Pakistan Stock Exchange on 18 September 2026, presented in Pakistani rupees. The filing includes an equity-accounted associate. The PSX result package says the full Annual Financial Statements will be transmitted separately and does not include an independent auditor’s report, so this article does not characterize the FY2026 result package as audited or unaudited. For the nine-month bridge, the March 2026 interim statements were explicitly unaudited.

AlphaGen model outputs

Alpha QoQ Score: 45.94

TTM Performance Score: 51.9

3Y Business Perf Score: 61.92

Sector Leadership Score: 67.6869

These four scores are AlphaGen model outputs, not company-reported figures.

Verdict

GOC finished FY2026 with a much stronger profit line than its modest sales growth would suggest. Revenue rose 7.7% and gross profit 7.0%, leaving the full-year gross margin almost unchanged, but profit from operations nearly doubled and profit after tax more than doubled. The main bridge was not a dramatic improvement in gross margin; it was a substantially lower operating-expense burden, especially administrative and other expenses. That is encouraging, but it also means the sustainability of the earnings step-up depends on whether those expense reductions are structural rather than timing-related.

The counterweight is cash conversion. Net operating cash flow swung to a Rs54.6 million outflow from a Rs21.5 million inflow, inventory rose 26.5%, trade debts more than doubled and cash balances fell 26.1%. GOC still ended the year with a very high current ratio and no separate borrowing line on the face of the balance sheet, so this is not a leverage story. It is a working-capital-quality story: accounting earnings strengthened materially while cash became more tied up in the operating cycle.

Results at a glance

  • FY2026 revenue was Rs508.78 million, up 7.7% from Rs472.32 million.
  • Gross profit increased 7.0% to Rs174.55 million. Gross margin was 34.31%, almost flat versus 34.52% a year earlier.
  • Profit from operations jumped 96.3% to Rs71.68 million, taking operating margin to 14.09% from 7.73%.
  • Profit before levy and taxation rose 90.1% to Rs71.47 million. Profit after tax rose 103.1% to Rs52.47 million and EPS increased to Rs7.14 from Rs3.51.
  • Net cash used in operating activities was Rs54.62 million versus Rs21.47 million generated in FY2025.
  • Year-end stock-in-trade rose to Rs369.47 million from Rs292.13 million; trade debts rose to Rs29.40 million from Rs13.04 million; cash and bank balances fell to Rs67.59 million from Rs91.48 million.
  • The Board recommended a final cash dividend of Rs2.00 per share, compared with the Rs1.00 per-share final dividend paid for FY2025.
  • Using the official FY2026 result minus the official unaudited nine-month figures, the implied Q4 generated about Rs113.40 million of revenue, Rs48.65 million of gross profit and Rs4.78 million of PAT. These are arithmetic residuals, not separately reported quarterly figures.

What improved

The biggest improvement was below gross profit. Gross profit increased by only Rs11.49 million year on year, but operating profit increased by Rs35.17 million. Distribution cost fell 4.8% to Rs27.74 million, administrative expenses fell 18.9% to Rs77.43 million and other expenses fell 59.4% to Rs9.51 million. Together, those three expense lines were roughly Rs33.4 million lower than the prior year. That more than explains why operating profit nearly doubled even though gross margin barely moved.

This matters because it changes the interpretation of the year. GOC did not suddenly become a much higher-margin manufacturer at the gross-profit level. Its gross margin stayed around 34%. The step-up came from keeping more of gross profit after operating expenses. Management had already said in the FY2025 annual report that overheads had remained under control despite inflation in input costs, and in the March 2026 directors’ report it again emphasized product quality, innovation and adapting to changing market needs. The FY2026 expense outcome is consistent with that earlier cost-discipline narrative, but the result filing does not provide detailed FY2026 expense notes, so attributing the entire decline to permanent efficiency measures would go beyond the public evidence.

Other income actually fell 45.2% to Rs11.81 million, and the share of profit from the equity-accounted investee fell to Rs0.92 million from Rs2.25 million. In other words, the profit improvement was not created by a larger other-income contribution or a stronger associate contribution. That improves the quality of the headline earnings bridge relative to a result driven mainly by non-operating gains.

The implied fourth quarter also improved sharply at the bottom line. Subtracting the official nine-month numbers from the official full-year result gives Q4 revenue of about Rs113.40 million, up 11.2% from the comparable residual, and operating profit of about Rs15.36 million versus an implied operating loss of Rs14.48 million a year earlier. PAT was about Rs4.78 million versus an implied loss of Rs17.24 million. Again, these are residual calculations rather than company-reported standalone Q4 figures, but they indicate that the prior-year Q4 loss did not repeat.

What weakened / needs attention

Gross-margin quality was not as strong as the PAT growth. Full-year gross margin slipped slightly to 34.31%. More notably, the implied Q4 gross margin was about 42.9% versus roughly 47.2% in the comparable residual period: Q4 sales rose about 11.2%, but gross profit rose only about 1.0%. The recovery in operating profit therefore depended heavily on lower below-gross-profit expenses rather than a stronger Q4 manufacturing margin.

Tax also absorbed more of the larger pre-tax profit. Current tax plus the share of tax of the associate totaled Rs16.41 million, up from Rs9.32 million. Profit before taxation nearly doubled to Rs68.89 million and PAT still more than doubled, so taxation did not derail the recovery, but it prevented the full operating improvement from flowing through one-for-one to shareholders.

Cash conversion is the clearest weakness. Net operating cash flow deteriorated by roughly Rs76.1 million year on year, moving from a Rs21.47 million inflow to a Rs54.62 million outflow. The year-end balance sheet helps explain why working capital deserves attention: stock-in-trade increased Rs77.34 million, trade debts increased Rs16.36 million and cash fell Rs23.88 million. The nine-month cash-flow statement had already shown a large working-capital absorption, including higher inventory and advances together with lower payables. By year-end, inventory had risen further from the March level, even though trade debts had come down from March.

This does not look like a solvency problem from the face of the result filing. Current assets were Rs633.06 million against current liabilities of Rs85.63 million, an implied current ratio of about 7.4 times, up from about 6.3 times. The statement shows no non-current liabilities and no separate bank-borrowing line. However, liquidity quality matters as much as the ratio: inventory represented roughly 58% of current assets, while combined cash and short-term investments fell to about Rs159.1 million from Rs216.6 million. The balance sheet is liquid in accounting terms, but more of that liquidity is now sitting in stock.

Revenue and sector context

GOC manufactures hockey sticks, cricket balls and other sporting goods in Sialkot. The latest FY2026 result filing does not provide a product or geographic revenue split, so it is not possible to responsibly attribute the 7.7% sales increase to cricket balls, hockey sticks, a particular export market or pricing. That distinction is important because the mix has historically moved materially from year to year.

The audited FY2025 annual report provides useful context without being a substitute for FY2026 disclosure. In FY2025, about Rs453.62 million of Rs472.32 million revenue came from exports—roughly 96%—and the largest disclosed product lines were cricket balls at Rs167.83 million, composite hockey sticks at Rs150.90 million and hockey sticks at Rs123.80 million. Management also said exports of wooden and composite hockey sticks had declined in FY2025 while the company was investing in research, product quality, brands and distribution. Until the FY2026 annual report provides the new mix, it would be inappropriate to assume those percentages remained unchanged.

The national backdrop was more supportive on a full-year basis. Pakistan Bureau of Statistics data reported through Associated Press of Pakistan show sports-goods exports rose 10.08% in FY2026 to US$424.35 million. Football exports increased 11.72%, gloves declined 5.91% and other sports goods increased 16.93%. That broad sector growth is directionally consistent with GOC returning to top-line growth after FY2025’s contraction, but it does not prove that the same categories drove GOC because GOC’s current product split has not yet been disclosed.

There is also an important end-of-year caution. Pakistan’s sports-goods exports in June 2026 were down 28.08% year on year and 35.04% month on month, according to the same PBS-based release. One weak month should not be mapped directly onto GOC’s three-month Q4, especially because customer shipment timing can be lumpy, but it reinforces why the next quarter’s order conversion and inventory normalization matter.

Balance sheet, cash flow and capital allocation

Total assets increased 5.0% to Rs808.37 million and equity rose 6.7% to Rs722.74 million. The balance sheet therefore remains overwhelmingly equity-funded. Current liabilities fell to Rs85.63 million from Rs92.59 million, while current assets rose 7.8%. On a static balance-sheet basis, that is a stronger liquidity cushion.

The cash-flow statement gives a more demanding picture. Operations used Rs54.62 million of cash, capital expenditure nearly doubled to Rs8.25 million, and the company still generated Rs38.05 million from investing activities, helped by Rs55.00 million of short-term investment proceeds, Rs8.94 million of dividend income and Rs3.05 million of profit on deposit accounts. Those investing inflows should not be confused with recurring manufacturing cash generation. After dividends of Rs7.31 million, cash fell by Rs23.88 million over the year.

The Board’s proposed final dividend of Rs2.00 per share implies a cash commitment of about Rs14.70 million on 7.35 million shares, roughly 28% of FY2026 PAT. That is a manageable payout relative to reported earnings and year-end liquid assets, but the more important test is whether FY2027 operating cash flow normalizes as inventory converts into sales and collections.

Historical pattern and earnings quality

The year breaks a two-year profit downtrend. GOC reported PAT of about Rs153.8 million in FY2023, Rs98.8 million in FY2024 and Rs25.8 million in FY2025 before recovering to Rs52.5 million in FY2026. Revenue also fell from Rs691.4 million in FY2023 to Rs578.7 million in FY2024 and Rs472.3 million in FY2025 before returning to Rs508.8 million. FY2026 is therefore a recovery year, but not yet a return to the scale or profit level seen in FY2023-24.

The recurring part of the recovery is clearest in the return to revenue growth and the stronger operating expense structure. The less certain part is how much of the administrative and other-expense reduction will persist. Because the FY2026 result package lacks the detailed notes that normally accompany the full annual report, investors should avoid mechanically annualizing the new operating margin until the composition of those lower expenses is disclosed.

What to monitor next

  • First, watch inventory. At Rs369.47 million, it is the largest working-capital item and rose much faster than sales. A healthy next cycle would show inventory growth slowing or reversing while revenue remains firm.
  • Second, watch operating cash flow. PAT has recovered; the next quality test is whether cash from operations follows. A return to positive operating cash generation would materially strengthen the earnings story.
  • Third, watch gross margin versus operating margin. FY2026 operating margin improved dramatically even though gross margin did not. If lower overheads are sustainable, the benefit can persist; if they were timing-related, margin could normalize.
  • Fourth, watch the new product and geographic mix when the full FY2026 annual report is transmitted. The prior year was highly export-oriented and concentrated in cricket balls and hockey sticks, but current-year mix is not yet public.
  • Fifth, watch sector shipment momentum. The FY2026 national sports-goods export trend was positive, but June weakened sharply. The next quarter will show whether that late-year softness was temporary for GOC’s addressable export markets.

Bottom line

GOC’s FY2026 result is a meaningful earnings recovery: sales returned to growth, operating profit nearly doubled and PAT more than doubled, while other income and associate profit actually declined. That makes the operating-expense reset the central positive. The main weakness is cash conversion, with a large operating cash outflow and a substantial inventory build despite a very strong static liquidity position. The next result needs to prove two things at once: that the lower expense base is durable and that the profit recovery can convert back into cash.

Sources

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