Fauji Foods Limited (PSX: FFL) reported a 10% decline in its consolidated profit after taxation for the first quarter ended March 31, 2026, recording Rs496.89 million compared to Rs551.11 million in the same period last year. Earnings per share (EPS) edged down to Rs0.28 from Rs0.31 in Q1 2025.
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The bottom-line pressure came primarily from a sharp increase in finance costs and rising overheads, even as the company delivered solid top-line growth and improved gross margins.
| Metric | Q1 CY26 | Q1 CY25 | Change |
|---|---|---|---|
| Profit After Taxation | Rs496.89m | Rs551.11m | -10% |
| Earnings Per Share (EPS) | Rs0.28 | Rs0.31 | -10% |
| Net Revenue | Rs8.36bn | Rs7.15bn | +17% |
| Gross Profit | Rs1.21bn | Rs1.08bn | +12% |
| Profit from Operations | Rs1.13bn | Rs1.01bn | +12% |
Revenue and Margin Expansion
The company delivered strong top-line growth with net revenue climbing 17% year-on-year to Rs8.36 billion from Rs7.15 billion. While cost of sales increased to Rs7.15 billion from Rs6.07 billion, the rise in direct costs was proportionally lower than revenue growth. This favorable dynamic resulted in a solid 12% expansion in gross profit, which rose to Rs1.21 billion.
| Income/Expense Category | Q1 CY26 | Q1 CY25 | Change |
|---|---|---|---|
| Net Revenue | Rs8.36bn | Rs7.15bn | +17% |
| Cost of Sales | Rs7.15bn | Rs6.07bn | +18% |
| Gross Profit | Rs1.21bn | Rs1.08bn | +12% |
Operational Overheads
On the operational front, total operating expenses grew by 13% to Rs74.29 million, with administrative expenses rising to Rs45.39 million and selling expenses increasing to Rs28.90 million. Despite these rising costs, profit from operations still recorded a 12% increase to Rs1.13 billion.
Finance Costs Surge
The most significant pressure on the bottom line came from a dramatic surge in finance costs, which skyrocketed by 147% to Rs493.21 million from Rs199.70 million in Q1 2025. This substantial increase in debt-servicing costs weighed heavily on earnings.
Profit and Taxation
Profit before taxation stood at Rs662.14 million, down 31% from Rs954.98 million in Q1 2025. Taxation expense also declined by 34% to Rs165.25 million, but this was insufficient to offset the steep rise in finance costs, resulting in the final net profit decline of 10%.
About Fauji Foods Limited
Fauji Foods Limited (PSX: FFL) is a subsidiary of the Fauji Foundation Group, one of Pakistan’s largest industrial conglomerates. The company manufactures and markets a range of dairy products, including milk, yoghurt, butter, and cheese, under trusted brand names such as Nurpur and Dairy Queen.
