Islamabad, In the second quarter of the fiscal year 2024, Pakistan's textile sector witnessed a mixed bag of results, with an impressive year-over-year growth in revenues and profit after tax (PAT), but a decline when compared to the previous quarter, reflecting the challenges posed by weak export prices and rising operational costs. A comprehensive analysis released by JS Global, the performance of eight key companies within the sector was scrutinized, revealing a 33% year-over-year increase in top-line revenues and a 30% growth in PAT. However, the sector experienced a 7% quarter-over-quarter decline in revenues and a significant 57% drop in PAT.

According to JS Global, attributes the year-over-year growth to an increase in volumes, which, however, was overshadowed by a decline in export prices that adversely affected the top-line growth. Additionally, the textile sector faced increased pressures from rising energy and borrowing costs, alongside the reduced or non-availability of previously approved financing limits which have further strained the industry's performance.

Despite the current challenges, the report offers a cautiously optimistic outlook for the future. It suggests that the direction of export prices will be a key determinant of the sector's core income, while the anticipated monetary easing could provide some relief to the struggling sector. This outlook comes after textile exporters saw a shift from previously offered reduced or fixed financing rates under various lending products to rates now linked to benchmark rates, impacting their operational costs.

As the textile industry navigates through these turbulent times, stakeholders are closely watching the impact of these factors on the sector's long-term sustainability and growth potential.