Karachi: The profitability of Pakistan’s textile sector is anticipated to decline by 12% year-on-year in the third quarter of fiscal year 2025, according to a report by AKD Securities Limited. The decrease is primarily attributed to reduced gross margins and increased taxation, overshadowing any relief from finance costs.

The report highlights company-specific projections, noting that Nishat Mills Limited (NML) and Nishat Chunian Limited (NCL) are expected to see earnings growth on an annual basis, with earnings per share (EPS) projected at PKR 4.58 and PKR 2.14, respectively, for the quarter. In contrast, Interloop Limited (ILP) is forecasted to experience a significant 66% drop in profitability, with EPS expected to fall to PKR 1.13 per share, largely due to a contraction in gross margins.

Despite these challenges, AKD Securities maintains a ‘BUY’ recommendation for ILP, NML, and NCL. The target prices set for December 2025 are PKR 104 per share for ILP, PKR 187 per share for NML, and PKR 64 per share for NCL.

The report underscores the ongoing pressures within the textile industry, as companies navigate the impacts of fluctuating gross margins and taxation policies. The analysis from AKD Securities provides insights into the performance expectations for key players within the sector, offering guidance for investors amid a challenging economic landscape.