Topline Pakistan Research recently reviewed the export performance of the Pakistan textile sector for September 2025 and published an important report. In September 2025, Pakistan’s textile exports reached US$1.6 billion, marking a 2% decrease year-over-year (YoY) but a 3% increase month-over-month (MoM).
In the first quarter of FY26, textile exports totaled US$4.8 billion, up 6% from US$4.5 billion in the first quarter of FY25.
Key findings include:
– The 2% YoY decline in exports in September 2025 was mainly due to a 25% YoY decrease in cotton cloth exports, which fell to US$150 million from US$200 million in September 2024.
– The 3% MoM increase in September 2025 exports was driven by a 4% MoM rise in the value-added segment, led by a 4% growth in knitwear and a 7% growth in bedwear.
– In Pakistani rupee (PKR) terms, textile exports amounted to Rs443 billion, down 1% YoY but up 3% MoM.
– The value-added segment remained stable year-over-year but rose 4% month-over-month in September 2025. Knitwear exports increased by 4% both YoY and MoM, reaching US$465 million.
Meanwhile, other value-added segments such as bedwear, towels, and readymade garments saw YoY declines of 1%, 5%, and 3% respectively, with MoM changes of +7%, +1%, and flat, reaching US$288 million, US$86 million, and US$329 million, respectively.
– The 6% YoY growth in the first quarter was primarily driven by an 8% increase in value-added textiles, with knitwear alone growing by 12% YoY. Other segments also rose by 6% YoY, while basic textiles experienced an 8% YoY decline due to a 14% drop in cotton cloth exports. This decline was attributed to low cotton crop yields in previous months, reduced international demand, and pricing pressures.
– In PKR terms, total textile exports for 1QFY26 were Rs1,351 billion, reflecting a 7% increase YoY, aided by a 1% appreciation of the rupee compared to 1QFY25.
– In quantity terms, September 2025 textile exports exhibited a 2% YoY decrease but a 5% MoM increase. Overall, quantities in 1QFY26 rose by 4% YoY.
– Looking ahead, we anticipate that FY26 textile exports will reach between US$19 billion and US$20 billion, compared to US$17.9 billion in FY25.
– The textile sector has experienced a recovery over the past two years, and we expect continued improvement in export performance. We maintain an overweight stance on the Pakistan textile sector, with NML as our preferred pick, as the company is currently trading at a FY26E price-to-earnings ratio of 8.1x.
