⚡ Flash Summary

GAMMON Pakistan Limited’s unaudited financial results for Q1 2026 (ended September 30, 2025) reveal a challenging period. The company experienced a significant net contract loss of PKR 218,070 compared to no contract income in the same period last year. This, coupled with operating expenses, led to an operating loss of PKR 5,327,877. The company reported a loss after tax of PKR 5,649,083, translating to a negative earnings per share (EPS) of PKR (0.20).

📌 Key Takeaways

• 📉 Net contract loss of PKR 218,070 compared to zero income in Q1 2025.
• 📉 Operating loss of PKR 5,327,877 against an operating profit of PKR 1,807,029 in Q1 2025.
• ⚠️ Loss after tax deepened to PKR 5,649,083 from a profit of PKR 1,333,920 in the corresponding period.
• 🔻 Negative earnings per share (EPS) of PKR (0.20) compared to a positive EPS of PKR 0.05 in Q1 2025.
• ❌ Total Assets decreased slightly from PKR 996,860,538 to PKR 991,122,637.
• 🔻 Revenue reserve declined from PKR 376,040,627 to PKR 370,629,012.
• 🔻 Accumulated profit decreased from PKR 376,040,627 to PKR 370,629,012.
• 💰 Cash and bank balances decreased slightly from PKR 1,946,260 to PKR 1,835,851.
• 🚧 Current liabilities remained relatively stable at around PKR 197 million.
• 👍 Share capital remained unchanged at PKR 282,662,310.
• 👍 Share premium reserve stayed constant at PKR 15,380,330.
• 👍 Long-term investments held steady at PKR 189,340,000.
• 👍 Long term security deposits remain stable at PKR 1,350,600

🎯 Investment Thesis

Based on the current financial performance, a SELL recommendation is warranted. The company’s transition to a net contract loss, coupled with increasing operating expenses and a significant loss after tax, indicates substantial challenges. The price target rationale is based on the expectation of continued losses and the absence of clear turnaround strategies. A price target revision would be necessary upon evidence of improved profitability and operational efficiency.

⚡ 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.