Nishat Mills Limited (NML) – A Deep Dive into Financial Performance and Strategic Growth (2019–2025)

Nishat Mills Limited (NML): Financial Trajectory, Ownership Structure & Future Outlook

Introduction

Established in 1951, Nishat Mills Limited (PSX: NML) is the flagship company of the Nishat Group and one of Pakistan’s largest vertically integrated textile manufacturers. NML engages in spinning, weaving, dyeing, printing, finishing, stitching, and even electricity generation, offering yarn, linen, and synthetic fiber products to both domestic and global markets.

With over 351 million shares held by 13,209 shareholders as of June 2024, the company reflects strong public trust and institutional backing.

Pattern of Shareholding (as of June 30, 2024)

• Local General Public: 35.09%

• Directors, CEO, Spouse & Minor Children: 25.22%

• Associated Companies & Related Parties: 8.93%

• Banks, DFIs, NBFIs: 6.93%

• Joint Stock Companies: 6.89%

• Modarabas & Mutual Funds: 4.78%

• Provident/Pension Funds: 4.17%

• Foreign Companies: 2.84%

• Foreign General Public: 1.88%

• Others: Remaining

Financial Performance Overview (FY2019–FY2024)

FY2019: Strong Recovery Post-Rupee Depreciation

• Sales: Rs. 63.5 billion (+18.18% YoY)

• GP Margin: 12.06% (vs 10.33% in 2018)

• NP Margin: 9.23%

• EPS: Rs. 16.66

• Drivers: Export rebound, cost rationalization, subsidized energy

FY2020: COVID-19 Impact

• Sales: Rs. 60.9 billion (−4.09% YoY)

• GP Margin: 11.95%

• NP Margin: 5.76%

• EPS: Rs. 9.97

• Challenges: Global lockdowns, export slump, workforce expansion

FY2021: Post-Pandemic Rebound

• Sales: Rs. 71.4 billion (+17.28%)

• GP Margin: 13.04%

• NP Margin: 8.29%

• EPS: Rs. 16.84

• Highlights: Surge in local sales, strong dividend income, reduced finance costs

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FY2022: Peak Performance

• Sales: Rs. 115.7 billion (+62.07%)

• GP Margin: 14.97%

• NP Margin: 8.91%

• EPS: Rs. 29.33

• Positives: Favorable pricing, high volumes, strong other income

• Concerns: Super tax impact, higher finance cost due to increased borrowings

FY2023: Highest Operating Margin Despite Inflation

• Sales: Rs. 141.75 billion (+22.45%)

• OP Margin: 15.76% (highest)

• NP Margin: 8.58%

• EPS: Rs. 34.60

• Notes: Strategic workforce reduction, robust other income (Rs. 10.2B), but soaring finance cost

FY2024: Margin Pressures Return

• Sales: Rs. 160.25 billion (+13%)

• GP Margin: 10.81% (down from 14.87%)

• NP Margin: 3.97% (lowest in 6 years)

• EPS: Rs. 18.11

• Capex: Rs. 18.74 billion in expansion (denim, energy, efficiency projects)

• Challenges: Higher energy prices, competition-driven price cuts, lower export growth

Recent Performance (9MFY25)

• Sales: Rs. 134.67 billion (+11.98% YoY)

• GP Margin: 11.32%

• OP Margin: 11.1% (vs 13.97% in 9MFY24)

• NP Margin: 3.59%

• EPS: Rs. 13.76

• Observations:

  • Local sales drove growth; exports remained mixed

  • Other income fell by 24.79%

  • Finance cost down 19.64% due to monetary easing

  • NP fell 9.51% YoY

Strategic Investments & Gearing Trends

• Capex Initiatives (FY24):

  • Workwear and denim expansion

  • Alternative and efficient energy projects

• Gearing Ratio Trends:

  • 2018: 20.77%

  • 2020: 27.31%

  • 2022: 34.68%

  • 2023: 40.77% (peak)

  • 2024: 39.94%

Rising gearing indicates increasing reliance on debt to support growth and modernisation.

Outlook: Opportunities & Risks Ahead

Positives:

• Improving macroeconomic conditions in Pakistan

• Declining energy costs

• Capacity expansions aligned with global demand trends

• Strong dividend-generating investments in associated companies

Risks:

• US tariff hikes threaten export growth

• Margin erosion due to inflation and competition

• Global textile demand volatility post-COVID recovery phase

• Elevated finance costs and gearing pressures

Conclusion

Nishat Mills Limited remains a textile behemoth in Pakistan’s industrial landscape, balancing export-driven growth with local market resilience. While the company has proven agile in managing costs and expanding strategically, margin pressures and global trade dynamics will play a defining role in shaping NML’s trajectory moving forward.

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