Karachi: The food sector reported an 8 percent year-over-year increase in revenue for the June 2026 quarter, driven by new product launches and expanded marketing efforts, amid stable operating margins. Despite this growth, the sector underperformed the broader market, with a 9 percent decline in market capitalization compared to the 1.8 percent decrease in the KSE100 Index.

According to JS Global, the financial analysis of nine listed food companies revealed a strategic shift towards increasing sales volumes to counteract the challenges of elevated energy and input costs. While most companies managed to maintain stable or slightly lower operating margins on both a year-over-year and quarter-over-quarter basis, FCEPL and UPFL were exceptions. Product diversification played a crucial role in stabilizing margins despite increased selling expenses.

The sector's market capitalization decline has resulted in price-to-sales and price-to-earnings ratios of 1.4x and 18x, respectively, based on the trailing four quarters' sales and earnings. FCEPL has emerged as the best-performing stock within the analyzed group, standing out in a challenging market environment.