Biafo Industries (FY2026): Higher Sales & Largin. Higher costs lower PBTPAT protected by lower taxes. Dividend reduced.

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BIFO's FY2026 top line was healthy, and gross margin actually improved, but the benefit was consumed by higher distribution/administrative costs, impairment and finance costs. The tax reduction protected the bottom line, resulting in almost flat earnings despite 10% revenue growth.

Sales grew 10% in FY2026, with GP margin improving to 36.3% from 35.7%. However, sharply higher distribution and administrative expenses, along with a Rs57.5m impairment loss versus a Rs12.5m reversal last year, reduced operating profit by 6%. Higher net finance costs and lower other income further reduced PBT by 9%. PAT was essentially flat, as the lower tax charge offset the decline in PBT.


Revenue & GP:

  • Revenue grew ~10.0% YoY (Rs 3,192.8mn vs Rs 2,902.1mn)
  • Gross profit grew faster, ~11.7% (Rs 1,158.5mn vs Rs 1,037.0mn)
  • GP margin improved slightly to 36.3% from 35.7% (+~55bps) — cost of sales grew slower than revenue

Effective tax rate:

  • FY26: 209.5/598.4 = 35.0%
  • FY25: 268.7/658.2 = 40.8%
  • Tax rate dropped ~5.8pp, which is the main reason net income held up despite the PBT decline

https://dps.psx.com.pk/download/document/283355.pdf