⚡ Flash Summary

GAMMON Pakistan Limited reported a challenging first quarter for 2026, with no contract revenue recorded. The company experienced a net contract loss of PKR 218,070, worsening from PKR 196,996 in the same period last year. The loss before taxation was PKR 5,549,083, compared to a profit of PKR 1,607,133 last year. Despite a reduction in taxation expenses, the company posted a loss after tax of PKR 5,649,083, a significant downturn from the profit of PKR 1,333,920 in the corresponding period of 2024.

📌 Key Takeaways

• ⛔️ No contract revenue was recorded during Q1 2026.
• 📉 Net contract loss increased to PKR 218,070 from PKR 196,996 YoY.
• ⚠️ Loss before taxation amounted to PKR 5,549,083, compared to a profit of PKR 1,607,133 last year.
• 💸 Taxation expenses decreased to PKR 100,000 from PKR 273,213 YoY.
• ❗️ Loss after tax was PKR 5,649,083, a sharp decline from the profit of PKR 1,333,920 last year.
• 🇵🇰 Economic environment in Pakistan remains difficult for the construction sector due to inflation and limited government spending.
• 🚧 Political and business climate uncertainty has slowed down private and public investment.
• 🔍 Management is actively pursuing available opportunities and focusing on improving operational efficiency.
• 💰 Partial recovery of outstanding receivables from the Maritime Technologies Complex (MTC) project achieved.
• 📑 Efforts continue for the settlement of remaining dues and final billing for the Old Bannu Road (OBR) project.
• 💼 The company is hopeful for a gradual revival of business activity with government concern over economic slowdown.
• 🎯 Focus remains on identifying and securing viable projects despite financial constraints.
• 🤝 The Board acknowledges the efforts of management, engineers, and employees, extending gratitude to bankers, clients, and suppliers.

🎯 Investment Thesis

Given the significant losses, lack of revenue, and challenging economic conditions, a SELL recommendation is warranted. The company’s turnaround is highly uncertain, and the current financial metrics do not support a positive investment outlook. Management’s efforts to improve operational efficiency and recover receivables are not yet translating into improved financial performance, making it a high-risk investment with limited potential for near-term gains. Price movement is estimated to decline.