Maqbool Textile Mills Limited (`MTML' or 'the Company') the flagship company of Maqbool Group — commenced operations in 1989 and is listed on the Pakistan Stock Exchange. With its head office based in Multan, the Company is engaged in cotton ginning, manufacturing, and sale of cotton and polyester yarn.

Maqbool Group started operations in 1958, with the incorporation of a yarn spinning unit Allawasaya Textiles & Finishing Limited. At present, the group has main interests in textile and seed oil extraction businesses. It was set up by the Maqbool family, a well-reputed business family of industrialists in Multan.

The Company is engaged in cotton ginning, manufacturing, and sale of yarn, cotton seed, and cotton lint. The Company operates with four spinning units installed at Muzaffargarh (Unit I, II, and IV), and Tobatek Singh (Unit III), having a total operational capacity of 82,224 spindles (at Unit 1,2 & 3) and 576 MSV installed spindles (at unit-4) which are equivalent to ~12,000 conventional spindles. The current energy requirement of the Company stood at 7 megawatts, which is primarily met through internally installed solar capacity, and WAPDA. The Company's registered office is located at 2-Industrial Estate Multan, Pakistan

Maqbool Textile is a public listed company with a majority stake held by Maqbool Group which is directly owned by individuals. Maqbool family holds a 75.2% stake in the Company while the remaining 24.8% stake is held by shareholders.

The second generation of the family has already been in business, serving in various capacities. No change in the ownership structure is anticipated in the foreseeable future. Furthermore, a formal succession plan will further improve the ownership prole of the Company.

MTML is one of the longest-established textile houses and has been operating under Mian Tanveer Ahmed Sheikh for over three decades. Over this period, the Company has developed signicant expertise in spinning and successfully expanded its operations, demonstrating resilience and adaptability within the highly competitive textile industry.

Besides MTML, Maqbool Group has invested in Mehmooda Maqbool Mills Limited. The sponsors of the Company have shown commitment to support Maqbool Textile, in case of need.

MTML's board comprises ten members. Seven members are from the sponsoring family. Four members are nonexecutive directors, three directors carry the executive role and three are independent directors. Ms. Romana Tanvir Sheikh serves the role of Chairperson. The inclusion of independent oversight has strengthened the governance matrix of the Company

Mr. Mian Tanvir Ahmed Sheikh is the Company's Chief Executive Ofcer. Tanvir Ahmad Sheikh is the renowned Industrialist of the Country having a Master‘s Degree in Business Administration from OHIO University, U.S.A. He has been quite successfully running the Complex Industrial Units of his Group since 1981. Mian Anis Ahmad Shiekh and Mian Atta Sha Tanvir Sheikh occupy the executive roles on the board along with the CEO. Both directors have extensive experience in the textile sector.

The Board is supported by two specialized committees: (i) the Audit Committee and (ii) the HR & Remuneration Committee, which provide assistance on relevant governance matters. To ensure effective oversight and decisionmaking, board meetings are held regularly, with formal documentation of meeting minutes maintained.

M/s. Yousaf Adil & Co. Chartered Accountants are the external auditors of the Company. The auditors have issued a qualied opinion on the Company's financial statements for the period ending June 30th, 2025.

The organizational structure of the Company is divided into ve main functions, namely i) Sales & Marketing, ii) Procurement, iii) Admin & Finance, iv) Production, v) IT. All operational departments report directly to the CEO, while the procurement department reports to the CEO and chairperson simultaneously.

The current CEO of the Company, Mr. Mian Tanvir Ahmed Sheikh has been associated with the Company since its inception. Mr. Tanvir is a distinguished industrialist with a Master's degree in Business Administration from Ohio University, USA. He has been successfully managing a group of industrial units since 1981. Mr. Ahsan Raza holds the position of deputy CFO in the Company.

The management meetings are held daily with follow-up points to resolve or proactively address operational issues, if any, eventually ensuring a smooth ow of operations. However, no management committees exist and the establishment will augment the management prole of the Company.

The Company's operating environment depends upon an IT Infrastructure supported by an in-house programmed ERP. The IT system is fully integrated into all major departments and ensures proper financial and operational control. Daily reports include cash and bank position, stock consumption, per-spindle cost, receivables, and inventory status while monthly production accounts are also maintained.

Production is completely order-driven to avoid stock pile-ups. There is a quality control department in place to audit the quality of the output. HSE infrastructure seems appropriate and is emphasized. The Company has adequate relevant quality control standards to meet export requirements. The Company has in-house internal audit department. The head of internal audit is reportable to the CFO.

The textile exports of the country reached USD 16.7bln in FY25, a slight increase from USD 16.5bln in the previous year, reecting a growth of 0.93% YoY. The highest contribution came from the composite and garments segment at USD 9.1bln, followed by the weaving segment at USD 6.5bln and the spinning segment at USD 1.0bln. During 5MFY25, the textile exports stood at USD 7.6bln. In FY25, the transition from the final tax regime to the normal tax regime is set to impact the profitability matrix of export-oriented units, with a 29% tax on prfiots and a super tax of up to 10%. The consistent decline in policy rates over the last two quarters, along with the anticipation of further reductions, is expected to provide a cushion in the financial metrics of the industry.

The Maqbool family has been associated with the textile business since 1958. However, as a group and on a standalone basis, their market share in the spinning sector is moderate. The company has installed a capacity of 82,224 spindles along with 576 MVS spindles in its production facilities. Considering the the existing capacity, the Company is considered a mid tier player in the Spinning segment.

During FY25, the Company’s profitability remained under pressure amid weakening revenue and margin compression. Revenue declined to PKR 8.4bln (FY24: PKR 10.3bln 3MFY26: 1.4bln), reflecting subdued business activity during the year. Gross margins deteriorated significantly to 0.7% (FY24: 3.7% 3MFY26: 0.8%), driven by rising cost pressures and limited pricing flexibility. Consequently, the Company slipped into losses with net margin declining to -1.7% (FY24: 0.3% 3MFY26: -4.2%), indicating a reversal in earnings performance. Return indicators also weakened, with ROE worsening to -41.7% (FY24: -27.8% 3MFY26: -42.6%), while ROA declined to 93.5% (FY24: 117.3% 3MFY26: 66.6%), highlighting reduced efficiency in generating returns from shareholders’ equity and asset base.

During FY25, the company’s gross margins declined to 0.7% (FY24: 3.7% 3MFY26: 0.8%), reflecting continued pressure on profitability amid rising costs and weak pricing power. This translated into a deterioration in overall earnings performance, with net margins slipping into negative territory at -1.7% (FY24: 0.3% 3MFY26: -4.2%), indicating a reversal from profitability in the previous year. Finance cost eased to 6.0% (FY24: 7.3% 3MFY26: 6.0%), providing some relief at the financing level. However, return indicators remained under stress, highlighting weakened efficiency in generating returns for shareholders and from the asset base.

The company is actively pursuing sustainability by enhancing operational efficiency and profitability through regular Balancing, Modernization, and Replacement (BMR) initiatives. Additionally, the Company is strategically reducing its energy costs by transitioning from WAPDA to solar power as energy costs constitute the primary risk factor for the sustainability of the Company’s cost structure, as evidenced by an 83.16% increase in power and fuel expenses, which has a significant impact on profitability.

At the end of 3MFY26, the company’s net working capital cycle increased to 87 days (FY24: 72 days), reflecting a decline in overall working capital efficiency. This decline came amid an increase in inventory days, which stood at 68 days (FY24: 62 days 3MFY26: 72 days), indicating relatively slower inventory turnover during the year. Trade receivable days remained stable at 35 days (FY24: 35 days), suggesting consistent credit management and collection efficiency, However during 3MFY26 there was an uptick of 67 days. Meanwhile, gross working capital days increased to 103 days (FY24: 96 days 3MFY26: 140), highlighting a higher level of funds tied up in current assets, which may exert pressure on short-term liquidity if not managed prudently.

During FY25, the Company’s coverage profile weakened, reflecting increased stress on its ability to meet financial obligations. Funds from Cash Operations (FCFO) declined sharply to 77 (FY24: 111 3MFY26: -11), indicating reduced internal cash generation available to service financing needs. Finance cost coverage also deteriorated to 0.3x (FY24: 0.4x 3MFY26: 0.2), highlighting a limited cushion to absorb debt servicing requirements. Moreover, the liquidity position turned negative, standing at -1.7 (FY24: 0.2 3MFY26: -1.5), underscoring mounting pressure on short-term solvency and signaling heightened reliance on external funding or working capital support.

At end-FY25, the Company’s capital structure remained highly leveraged, with total borrowings increasing to PKR 69.1bln (FY24: PKR 60.5bln 3MFY26: 68.2%), reflecting a continued reliance on debt financing. The composition of borrowings shifted in favor of longer-tenure facilities, as short-term borrowings declined to 48.9% of total borrowings (FY24: 82.9% 3MFY26: 50.5%), indicating re-profiling in the maturity profile of the Company’s debt. However, despite this restructuring, the elevated level of leverage continues to pose pressure on the Company’s financial risk profile.