EPCL swings to profit in 3MCY26

April 22, 2026 (MLN):  Engro Polymer & Chemicals Limited (PSX: EPCL) reported a remarkable financial turnaround for the first quarter ended March 31, 2026, swinging from a heavy net loss of Rs824.59m in the same period last year to a net profit of Rs370.84m.

Reflecting this massive recovery, the company's earnings per share (EPS) turned positive, posting Rs0.41 compared to a loss per share of Rs0.91 in Q1 2025.

The core driver of this turnaround was a robust top-line expansion that comfortably outpaced the rise in direct costs.

EPCL’s net revenue from contracts with customers jumped by 24% year-on-year, reaching Rs22.18bn up from Rs17.87bn.

Meanwhile, the cost of sales grew at a slower pace of 19% to Rs19.64bn. This favorable dynamic nearly doubled the company’s gross margins, with gross profit surging 95% to Rs2.54bn from Rs1.30bn.

On the operational front, the company demonstrated solid cost control and benefited from strong secondary income.

Administrative expenses were trimmed by 14% to Rs435.12m. Although distribution and marketing expenses rose 35% (Rs178.6m) and other expenses increased by 44% (Rs155.64m), a massive  jump in "other income" to Rs420.57m completely offset these hikes.

Fueled by the expanding gross profit and higher other income, EPCL’s operating profit skyrocketed to Rs2.19bn compared to just Rs717.07m last year.

Below the operating line, EPCL still faced high debt-servicing pressures. Finance costs increased by 19% to Rs1.78bn.

However, the sheer strength of the operational turnaround absorbed this financial burden, pushing the income before income tax into positive territory at Rs290.07m, reversing a pre-tax loss of Rs843.29m in the prior year.

Finally, the company booked a positive income tax figure (credit) of Rs80.77m, which further bolstered the bottom line, cementing the final net profit for the quarter at Rs370.84m.

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