AL Habib Capital Markets has reported a landmark turnaround in Pakistan’s steel industry during FY26 as the sector shifted from a net loss in FY25 to profitability driven by stronger construction activity and rising demand for long and flat steel products. Net sales rose 20 percent year-on-year to PKR 294.7 billion, while cost of sales increased 16 percent to PKR 264.4 billion, resulting in gross profit growth of 73 percent to PKR 30.3 billion and margin expansion to 10 percent from 7 percent. Operating profit more than doubled to PKR 17.6 billion, supported by lower financial charges, which declined 30 percent to PKR 12.9 billion, providing a PKR 5.6 billion earnings benefit. Net margin turned positive at 2 percent in FY26, up from -3 percent in FY25, reflecting broad-based profitability.

In 4QFY26, the recovery strengthened with net sales up 28 percent year-on-year and 14 percent quarter-on-quarter to PKR 83.8 billion, while gross profit surged 116 percent year-on-year and 48 percent quarter-on-quarter to PKR 9.9 billion, lifting gross margin to 12 percent. Profit after tax reached PKR 1.1 billion, up 100 percent quarter-on-quarter, compared with a net loss of PKR 2.1 billion in 4QFY25. The eight main listed steel companies selected from long and flat segments now comprise 2.4 percent of the total market capitalization of the KSE100.

Analysts highlight that continued construction activity, infrastructure projects, and lower finance costs will sustain profitability, positioning the steel sector as a key driver of Pakistan’s industrial growth trajectory.