Nishat Mills Limited is a public limited Company incorporated in Pakistan under the Companies Act, 1913 (now Companies Act, 2017). It is listed on the Pakistan Stock Exchange Limited.

Nishat Mills Limited is the flagship Company of the Nishat Group, one of the most prominent and diversified business conglomerates in Pakistan. Established in 1951, NML has grown into one of the largest vertically integrated textile companies in the country, with a strong presence across the entire textile value chain. The Company operates with a vision to remain at the forefront of the industry, committed to protecting stakeholder interests, supporting the community, and driving economic progress in Pakistan.

The Company has a diverse product range and is engaged in textile manufacturing, including spinning, combing, weaving, bleaching, dyeing, printing, stitching, and apparel production. It is also involved in the buying, selling, and trading of yarn, linen, cloth, and other goods and fabrics made from raw cotton, synthetic fibers, and cloth. Additionally, the Company generates, accumulates, distributes, supplies, and sells electricity. The Company’s current operational capacity includes 237,408 spindles, 1,105 looms, 10,320 rotors, 24 thies dyeing machines, 4 rotary printing machines, 11 digital printing machines, 7 thermosol dyeing machines and 5,103 stitching machines. Overall, Nishat Mills operates with 37 manufacturing units, each specializing in a specific product range.

Mian Mansha's family collectively owns the majority (~51%) shares of the Company directly through Individuals (~42%) and Group Companies (~9%). The remaining (~49%) stake of the Company is spread among Financial Institutions, General Public and Others.

The Company’s ownership structure is expected to remain stable in the foreseeable future, primarily due to its affiliation with the Nishat Group, a well-established and diversified business conglomerate in Pakistan. The sponsors maintain effective control over the Company through their significant shareholding and strategic influence within the Group. The next generation of the Mansha family has been successfully integrated into the business, playing active roles in both strategic decision-making and day-to-day operations. Leadership responsibilities are functionally divided among the three brothers, each of whom oversees distinct business sectors or verticals within the Group, thereby ensuring continuity, operational efficiency, and long-term sustainability of the Group.

The sponsors possess extensive and diversified business experience across multiple key sectors of the economy, including textiles, cement, banking, insurance, power generation, hospitality, agriculture, dairy, and paper products. Their strong business acumen and strategic foresight have enabled them to navigate various economic cycles effectively, mitigating risks while maintaining a consistent growth trajectory. This depth of experience has contributed significantly to the long-term resilience and expansion of the Group’s operations, positioning it as one of the leading conglomerates in Pakistan.

Nishat Group possesses a substantial asset base of approximately PKR 4trln, diversified across multiple economic sectors — a testament to the sponsor's solid financial standing. The strength of NML is further supplemented by its Holdco status, with a consolidated equity base of PKR 187.2bln and a consolidated topline of PKR 98.2bln as of 1HFY26.

The board comprises seven members, including two directors representing the sponsoring family — the Chairman and the CEO. The composition includes two independent directors, four non-executive directors, and one executive director, reflecting a strong governance framework.

The Chairman, Mr. Hassan Mansha, an Honorary Consul of Brazil in Pakistan, has over 25 years of diversified experience and holds directorships in Nishat Power Limited, Security General Insurance Company Limited, Lalpir Power Limited, Nishat Hotels and Properties Limited, and other Group companies. Mr. Syed Zahid Hussain, a fellow of the Institute of Management (England), the International Biographical Centre (USA), and the Institute of Marketing Management (Karachi), is recognized for his multi-faceted talents and professional accomplishments. Mr. Farid Noor Ali Fazal, with a background in Commerce, Law, and Management, has nearly 51 years of experience in marketing, logistics, and administration, and currently serves as Senior Vice Chairman of the All Pakistan Cement Manufacturers Association (APCMA). Mr. Mahmood Akhtar holds an MBA from the University of the Punjab and brings over 48 years of managerial experience. Mrs. Sara Aqeel, a gold medalist in Law, has practiced at Ramday Law Associates with a focus on corporate and banking sector cases. Mrs. Mehak Adil holds an LLM from the London School of Economics and Political Science, specializing in Corporate and Commercial Law, and is an Advocate of the High Courts of Pakistan with expertise in domestic and international dispute resolution, including arbitration.

In alignment with effective corporate governance practices, the Company has constituted an appropriately sized Board, supported by two key committees — the Audit Committee and the Human Resource & Remuneration Committee chaired by Mrs. Mehak Adil and Mrs. Sara Aqeel. In FY25, four Board meetings were held, enabling the Board to effectively discharge its oversight responsibilities. The minutes of these meetings were formally recorded and well-documented. In the same period, the Audit Committee convened four meetings, while the Human Resource & Remuneration Committee held one meeting with strong attendance by all members. This structured approach reflects the Company’s commitment to board effectiveness.

To uphold high standards of transparency and financial integrity, the Company has appointed M/s. Riaz Ahmad & Company, Chartered Accountants, as its external auditors. They expressed an unqualified opinion on the Company’s financial statements for the period ended June 30, 2025 and December 31, 2025. The Company has established a strong system of internal and financial controls to protect its assets, prevent fraud, and ensure compliance with legal regulations. This control framework is regularly reviewed and monitored by the Internal Audit function, established by the Board Audit Committee.

The management control of the Company is vested with Nishat Group and is supported by a well-defined and structured reporting framework, comprising several key departments to ensure the smooth flow of operations. These departments are further divided into various subdivisions, facilitating clear reporting lines across all levels of the organization. The reporting structure is designed to enhance transparency and ensure that all departments and functions remain aligned with the Company’s strategic objectives. All department heads, including the CFO, report directly to the Company's CEO.

Mr. Umer Mansha, the Chief Executive Officer, holds a Bachelor's degree from Babson College, Boston, USA. He serves on the board of Adamjee Insurance Company Limited, MCB Bank Limited, Adamjee Life Assurance Company Limited, Nishat Dairy (Private) Limited, Nishat Hotels and Properties Limited, and several other Group companies. Mr. Mansha has been associated with the Company since 1994 and is primarily responsible for managing the Company's overall affairs. He is supported by a team of highly qualified and experienced professionals. The Chief Financial Officer, Mr. Muhammad Azam, has been associated with the Company since 1991. He brings over 42 years of comprehensive experience, with deep expertise in the textile industry. His extensive knowledge and industry insight contribute significantly to the Company’s operational initiatives.

The Company has established several management committees to support strategic planning and operational oversight. These committees review performance, ensure operational efficiency, and formulate forward-looking strategies. Regular management meetings provide a platform for effective communication, coordination, and timely decision-making. The top management tier plays a pivotal role in ensuring the efficient delegation of functional responsibilities across departments and alignment with the Company’s overall objectives.

The Company has implemented an Oracle-based Enterprise Resource Planning (ERP) system, Oracle version 10, which provides comprehensive Management Information System (MIS) reporting. The Company’s monthly MIS includes detailed segment-wise and unit-wise performance reports, covering daily raw material consumption, production, inventory status, monthly pricing analysis, and a comparison of actual vs. budgeted performance. Additionally, it includes reports on exports vs. imports and plant efficiency, ensuring thorough monitoring and analysis of operational performance.

NML is accredited with internationally recognized compliance certifications, reflecting its commitment to maintaining high standards in quality, safety, and sustainability. These certifications cover various areas, including product quality, environmental management, occupational health and safety, and social responsibility. To ensure continuous compliance, the Company undergoes regular audits and assessments by third-party auditors, enabling the Company to maintain its certifications and implement improvements as required.

Textile exports reached USD 17.9bln in FY25, a modest rise from USD 16.7bln the previous year, reflecting a 7.2% year-over-year growth. The largest contribution came from the composite and garments segment, at USD 14bln, which included weaving at USD 1.8bln and spinning at USD 0.7bln. The production of cotton cloth in FY25 declined by approximately 0.7% year over year, reaching around 877.1mln square meters. During FY25, about 25.3% of the cotton cloth produced was exported (compared to roughly 27.2% in FY24), with the rest used for the domestic market. The country's fabric exports fell by approximately 4.4% in FY25 (FY24: up about 5.8% YoY), with approximately 23.4% of Pakistan's cotton cloth exports going to Bangladesh (compared to about 19.9% in FY24), followed by the USA with about 8.1% of cotton cloth exports (compared to approximately 7.8% in FY24). In FY25, the transition from the final tax regime to the normal tax regime is expected to affect the profitability of export-oriented units, with a 29% tax on profits and a super tax of up to 10%. The recent removal of GST exemption (Finance Bill, 2025) on textile inputs for exporters registered under the Export Facilitation Scheme (EFS) will offer tax protection and create a level playing field for domestic cotton and yarn producers. Currently, international cotton prices are higher than the price of locally produced cotton. The gap has widened to approximately 9.8 cents per pound (as of July 18, 2025), resulting in an average increase of about USD 36.8 per bale of imported cotton. A greater reliance on imported cotton could lead to higher raw material costs, ultimately impacting yarn prices and profit margins for the sector. Conversely, energy and finance costs are expected to stay within a range, given the projected reduction in interest rates and the absence of any major energy tariff increases. Considering the current climate change, flooding in major cotton regions, and shifting crop patterns, the target of approximately 10.2mln bales for FY26 appears challenging.

Nishat Mills Limited is considered one of the largest textile exporters in Pakistan and falls in the top tier of the respective universe. The competitors of NML are Yunus Textile Mills Limited and Gul Ahmed Textile Mills Limited.

A substantial share of the Company’s revenue is driven by export sales, while the remaining portion is derived from local sales. Over the years, the topline experienced a 3-year CAGR of 15.6% from 2023 to 2025, reaching PKR 178.1bln (FY24: PKR 160.2bln). During 1HFY26, the Company’s revenue base exhibited a slight decrease at PKR 86.9bln (1HFY25: PKR 89.4bln), down by approximately 2.79% on a quarter-on-quarter basis. The sales mix skewed remained largely unchanged. Despite the product pricing challenges in the international market, the exports accounted for ~55.4% of the total revenue, tumbling to PKR 48.1bln (1HFY25: PKR 48.3bln). Yarn and Grey Cloth were the top-performing products in 1HFY26, with a contribution of PKR 24.8bln and PKR 18.4bln to the Company's topline. These were followed by Processed Cloth, Made-ups, Garments and Towels & Bathrobes. Europe continues to be the prime export destination during the period under review. The top ten customer concentration of the Company remained slightly elevated but the Company's long-term association with the well-established entities of the industry, including Interloop Limited, Style Textile (Pvt). Limited, Artistic Milliners (Pvt). Limited, US Denim Mills (Pvt). Limited, Sapphire Finishing Mills Limited, and a few others provide comfort.

In 1HFY26, the Company’s profit margin went down to 10.2% (1HFY25: 11.8%) on the back of expensive raw material procurement, the surge in energy tariffs, and a revision in the wage rate. Despite controlled operating expenses, the Company’s operating profit margin stood at 3.8% (1HFY25: 5.7%). The Company’s finance cost declined to PKR 3.6bln (1HFY25: PKR 4.5bln), following a gradual decrease in the interest rate. Consequently, the bottom line witnessed a dip on a quarter-on-quarter basis, standing at PKR 3.3bln (1HFY25: PKR 4.1bln), with the net profit margin of 3.9% (1HFY25: 4.6%).

On the strategic side, the denim and workwear units have now been commercialized with a healthy contribution to the Company's topline. Furthermore, the management plans to venture in a new couduroy project alongside investment in solar battery storage systems. 

The Company finances its working capital requirements through a mix of internal cash generation and short-term borrowings (STBs). As of 1HFY26, the Company’s net working capital cycle has stretched to 152 days (FY25: 123 days), primarily due to an elongated inventory cycle of 118 days (FY25: 91 days). This increase is attributable to higher working capital deployment across the value chain to support operational requirements. The Company maintains adequate borrowing capacity, as reflected in its short-term trade leverage. Furthermore, the liquidity profile remains strong, evidenced by a current ratio of 4.6x (FY25: 4.7x).

In 1HFY26, the Company’s free cash flows from operations (FCFO) declined to PKR 4.7bln (FY25: PKR 10.8bln), primarily due to a reduction in profit before tax (PBT). However, the impact on coverage metrics remained contained, supported by a corresponding decline in finance costs. Accordingly, the interest coverage and core operating coverage stood at 1.9x (FY25: 1.8x) and 0.9x (FY25: 1.0x), respectively. Nonetheless, the Company’s debt payback period extended further to 11.6 years (FY25: 10.1 years), indicating a moderation in the cash flow generation capacity.

The Company maintains a moderately leveraged capital structure, with the leverage ratio inching up to 38.6% in 1HFY26 (FY25: 38.1%). The equity base strengthened to PKR 153.4bln (FY25: PKR 144.6bln), primarily driven by the retention of earnings. The debt profile expanded, with total borrowings rising to PKR 96.6bln (FY25: PKR 88.9bln), mainly to finance elevated working capital requirements. Of this, short-term borrowings (STBs) constitute a significant portion at 70.7%, amounting to PKR 68.2bln (FY25: PKR 60.2bln).