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The COVID-19's economic impact has begun to be felt by several nations. Domestically, supply shortages and limited mobility have been brought on by social distancing tactics, particularly lockdowns. This, together with the decline in international trading brought on by import restrictions and the deferral or cancellation of export orders, has significantly slowed down economic activity. The COVID-19 lockdown has had an impact on a number of economic sectors, particularly the textile industry, which contributes for 40% of the labor force, 60% of exports, and 8% of Pakistan's GDP. The study purpose is to explore the impact of covid-19 on financial performance of textile sector of Pakistan and how government relief efforts have helped to mitigate COVID-19's impacts. The study applies a regression model for analysis. The investigation is based upon a data set of 130 textile firms registered on Pakistan stock exchange. By using empirical analysis, study is able to prove that the Covid-19 had a detrimental impact on the financial performance of the textile sector as assessed by ROA, ROE, and Tobin's Q. Our investigation showed that the COVID-19 outbreak significantly affects the financial performance of domestically oriented listed textiles industries by reducing net profit and overall revenue. It is astounding to realize that COVID-19 has not had an impact on the export-oriented textiles firms. Analysis reveals that domestically oriented textile firms are significantly more negatively impacted than textile firms oriented on exports.

Keywords: ROA, ROE, Tobin’s Q, TR, Covid-19, FCF, LEV, PM.