April 23, 2026 (MLN): Biafo Industries Limited (PSX: BIFO) reported a solid 17% increase in its net profit for the nine months ended March 31, 2026, reaching Rs327.62m compared to Rs280.59m in the corresponding period last year.

Reflecting this healthy bottom-line growth, the company's basic and diluted earnings per share (EPS) improved to Rs7.06 from Rs6.05 in 9MFY25.

The primary driver of this growth was a robust top-line expansion. The company’s net revenue grew by 23% year-on-year, reaching Rs2.71bn up from Rs2.20bn.

While the cost of sales grew at a slightly faster pace of 24%, settling at Rs1.78bn, the overall volume of sales allowed the gross profit to secure a 21% increase, reaching Rs935.05m compared to Rs770.93m in the prior year.

On the operational front, overheads escalated significantly. Distribution expenses surged by 79% to Rs130.02m, while administrative expenses rose 16% to Rs204.39m. Additionally, net impairment losses charged on financial assets spiked 74% to Rs25.51m, and other income saw a sharp 60% decline, dropping to Rs4.92m.

Despite these rising operational costs and reduced secondary income, the strong gross margin expansion pushed the operating profit up by 12% to Rs580.05m.

Below the operating line, BIFO faced some financial headwinds. Finance costs increased by 44% to Rs49.54m, while finance income dropped 27% to Rs14.96m. This dynamic caused the net finance cost to spike by a massive 149% to Rs34.57m.

Despite the higher debt-servicing burden and increased statutory charges (Workers' profit participation fund and Workers' welfare fund), profit before income tax still managed a 7% improvement, reaching Rs506.32m.

The final catalyst that boosted the bottom line was a lower tax burden. A 7% reduction in income tax expense, which fell to Rs178.70m, allowed the company to comfortably secure its 17% leap in final net profit, closing the nine-month period at Rs327.62m.

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