Gul Ahmed Textile Mills Limited ("GATM" or "the Company") has been operating in Pakistan since 1953 and is listed on the Pakistan Stock Exchange.

Gul Ahmed Textile Mills Limited was incorporated in Pakistan on 1st April 1953 as a private limited Company and subsequently converted into a public limited Company on 7th January 1955. The Company is a subsidiary of Gul Ahmed Holdings (Pvt.) Limited. GATM is a flagship Company of the group.

GATM is a vertically integrated textile company with operations across following key segments: Spinning, Weaving, Home Textiles, and Retail, each operating as a separate profit center. The retail segment was demerged in 2021 and operates through the wholly owned subsidiary, Ideas (Pvt.) Limited, strengthening the Company’s presence in the domestic retail market. The Company’s registered office is located at Plot No. H-7, Landhi Industrial Area, Karachi. The Company’s total power requirement is approximately 30MW, currently met through a mix of renewable energy, gas, HFO, diesel, and power supplied by K-Electric. To optimize energy costs and enhance sustainability, GATM has undertaken several renewable energy initiatives, including a 20MW solar power plant with an 11.6MWh battery storage system, financed through long-term borrowings. Additionally, the Company is investing in a 10MW wind project and an additional 11MW solar capacity, expected to become operational by 1QFY27. Furthermore, the Company is in the process of partially shifting its spinning capacity to Nooriabad, where it plans to install 7.5MW wind capacity, 6MW solar capacity, and a 20–25MWh battery energy storage system. Collectively, these initiatives are expected to enable the Company to meet around 50% of its power requirements through renewable energy sources, reflecting a strategic focus on cost efficiency and sustainability.

The Company's ownership structure is primarily controlled by its holding company, which holds a majority stake of ~55.85%, signifying substantial influence over strategic decisions. Associated entities collectively own ~13.45%,. Financial Institutions hold ~7.90%, while Investment Companies & Mutual Funds own ~5.17%, indicating market confidence and professional fund management involvement. Individuals account for 16.30%, contributing to liquidity but also potential market volatility. The remaining 1.42% is collectively held by Insurance Companies, Modaraba Companies, Charitable Institutions, and Government Departments, showcasing diversified participation

The Company demonstrates strong ownership stability, with the second generation of the business fully engaged in its operations. This continuity ensures the preservation of the founding vision while integrating modern strategic approaches. The presence of a holding company strengthened the ownership matrix of the Company.

The Bashir family possesses a wealth of experience spanning ~7 decades in the textile industry. The intimate knowledge of textile mill operations, coupled with their exceptional skills in the strategic planning and policy formulation, positions them as one of the prominent industry leaders.

Ideas (Pvt.) Limited, a subsidiary of GATM,  operates in the textile retail segment, contributing PKR 27bln to the Company's consolidated topline of PKR 185bln as of FY25. The Company's strong financial position is reinforced by its consolidated figures and robust corporate background, reflecting stability and sustained growth potential.

The board comprises seven members (six male directors, and one female director) including the CEO and Chairman. The Company's board structure reflects strong family representation, with four out of seven members belonging to the sponsoring family, while two are independent directors. The inclusion of independent oversight has strengthened the governance matrix of the Company.

Mr. Mohomed Bashir – Chairman of the Group – is a business veteran entrusted with various honorary consular positions by the Government of Pakistan. He also serves on the Board of various other companies. Mr. Zain Bashir, the Company's Vice Chairman, is a certified director from Pakistan Institute of Corporate Governance (PICG), and is associated with the Company since 1997. His extensive association with the textile sector has provided him with in-depth industry knowledge. The other Board members also possess diversified experience and reasonably long association with the Company.

GATM has established two board committees, Audit Committee, and Human Resource and Remuneration Committee, aiding in the board effectiveness. During FY25, four meetings of the board of directors were held to evaluate the Company's overall performance towards its targets. The minutes of those meetings have been formally documented.

The Company has appointed BDO Ebrahim & Co. Chartered Accountants as its internal auditor, replacing Grant Thornton Anjum Rahman Chartered Accountants. Yousuf Adil Chartered Accountants, served as the external auditor for the previous financial year, issuing unqualified opinions on the financial statements for the year ended June 30, 2025. Both auditors are listed in the ‘A’ category of the State Bank’s panel.

The business profile is structured into distinct divisions, each led by dedicated managers, ensuring effective oversight and operational efficiency. The Company's operations are segmented into following key areas: i) Spinning, ii) Weaving, iii) Home Textiles, and iv) Retail. The respective segment managers report directly to the CEO, fostering streamlined decision-making and reinforcing a lean organizational structure.

Mr. Mohammed Zaki Bashir joined Gul Ahmed Textile Mills Limited in 2005 and became a Board member in 2008. He currently serves as the Chief Executive Officer, leading the Company’s strategic and operational initiatives. He holds a graduate degree from Regents Business School, UK. He is also a member of the Executive Committee of APTMA and has been part of the Entrepreneurs Organization since 2014.

The functions of the management are defined clearly to effectively achieve its underlying goals and objectives. Further, weekly one-to-one meetings are held with all departmental heads where the performance of each department is discussed at length. However, establishment of committees will augment the management framework of the Company.

The Company has deployed Oracle EBS 12.1 and Microsoft Dynamics as ERP solutions, utilized by Ideas (Pvt.) Limited, to integrate business functions and support timely management decision-making. Additionally, a SCADA system has been implemented in the manufacturing unit to enhance automation and operational efficiency, while Microsoft Dynamics Cloud is fully operational in the retail segment. The Company is currently transitioning to Oracle Fusion, which offers advanced integrated functionality and AI-powered chatbots, further strengthening digital capabilities across its operations.

The Company’s monthly MIS includes detailed segment-wise and unit-wise performance reports, regularly reviewed by senior management. The Company holds multiple internationally recognized certifications, ensuring compliance with global standards. The Company maintains valid certifications for its products and facilities, which undergo periodic audits by leading certification bodies, including SA 8000:2014, ISO 9001:2008, Oeko-Tex Standard 100 (Apparel and Home Textile Class I & II), GOTS, OCS, and several others.

Pakistan’s textile exports rose to USD ~17.9bln in FY25, recording a ~7.4% YoY growth, driven predominantly by value-added segments. Knitwear (USD ~5.0bln), readymade garments (USD ~4.1bln), and bedwear (USD ~3.1bln) collectively contributed over two-thirds of total exports, while cotton yarn and cotton cloth exports continued to decline, reflecting structural inefficiencies and high energy costs. During 5MFY26, export momentum moderated, with ~2.7% YoY growth, led by garments and knitwear. On the supply side, domestic cotton production fell sharply by ~30.7% YoY in FY25, resulting in a ~54.9% YoY surge in textile imports to USD ~4.2bln, primarily due to raw cotton. Import reliance eased in 5MFY26, with raw cotton imports declining by ~31.4% YoY, supported by improved arrivals and the withdrawal of sales tax exemption on imported cotton under the Finance Act 2025. Profitability dynamics weakened following the shift from the Final Tax Regime to the Normal Tax Regime, exposing exporters to a 29% corporate tax and super tax of up to 10%. However, the sharp decline in policy rates to ~10.5% by Dec’25, alongside subsidized export financing, has begun to stabilize margins and improve financial metrics, as reflected in the profitability rebound during 1QFY26. Overall, value-added exports and easing monetary conditions are partially offsetting persistent cost and policy pressures, supporting a cautiously stable industry outlook.

Gul Ahmed Textile Mills Limited (GATM) is one of the largest vertically integrated textile units in the country. The Company holds a strong market position, ranking among the top five textile exporters. It operates as one of the leading player within the industry, reinforcing its standing in the overall textile landscape.

The Company’s revenue base remains predominantly export-driven, with exports contributing ~69.9% of total sales. Key export destinations continue to be Germany, the United States, the United Kingdom and Italy, reflecting a moderately diversified geographic footprint. Export revenues mainly comprise home textiles, while yarn, fabric, and retail clothing are sold locally. During FY25, the Company’s topline increased to ~PKR 158bln, registering growth of ~10.3% compared to ~PKR 143bln in FY24. In ~3MFY26, the topline stood at ~PKR 40.6bln, reflecting a modest growth of ~2.8% over the comparative period, indicating relatively slower growth at the start of FY26 amid margin pressures and normalization of demand.

Profitability indicators weakened in FY25 compared to FY24. During FY24, the gross margin stood at ~12%, while the operating margin was recorded at ~7.3%. In FY25, the gross margin remained around ~12.0%; however, operating margin declined to ~6.7%, mainly due to elevated administrative and selling expenses. Finance costs increased in absolute terms to ~PKR 6.1bln in FY25 (FY24: ~PKR 5.4bln), reflecting higher average borrowings and higher interest rates. Consequently, net profit declined to ~PKR 4.0bln in FY25 from ~PKR 4.7bln in FY24, with net margin compressing to ~2.5% (FY24: ~3.3%). During ~3MFY26, margin pressures became more pronounced. The gross margin declined to ~9.8%, while the operating margin reduced to ~4.2%. Net profit margin stood at only ~0.6%, with profit after tax recorded at ~PKR 234mln, indicating the impact of higher costs and relatively subdued operating leverage in the early part of FY26.

Looking ahead, the Company aims to enhance cost efficiency and improve margins through strategic energy management. To mitigate the impact of rising energy costs—a key risk to its cost structure—GATM has integrated renewable energy into its power mix, including 20 MW of solar capacity already installed and additional planned solar and wind projects. The Company will continue to focus on operational efficiency and financial sustainability to support profitability and long-term growth.

Working capital indicators have demonstrated gradual improvement over the review period, although they continue to reflect the structurally elongated cash conversion cycle typical of the textile sector. The inventory holding period stood at approximately 127 days as of end-Jun’25, remaining broadly stable compared to 112 days at end-Jun’24 and showing improvement from 119 days at end-Jun’23. The elevated inventory levels are primarily attributable to bulk cotton procurement to mitigate raw material price volatility, while higher finished goods inventories are maintained to ensure timely fulfillment of export commitments. Net working capital days improved meaningfully to approximately 143 days in FY24 from 170 days in FY23, before moderating slightly to 152 days in FY25, where they remained largely stable. This trend reflects better working capital discipline, albeit within the constraints of the business model. Additionally, short-term trade leverage declined to around 27.8% in FY25 from 29.9% in FY24, indicating a gradual reduction in reliance on short-term trade liabilities and a modest strengthening of the working capital structure.

Cash flow generation remained adequate despite margin pressures. During FY24, free cash flow from operations (FCFO) stood at ~PKR21.2bln. In FY25, FCFO declined to ~PKR14.9bln, reflecting higher working capital absorption and increased finance costs, though it remained sufficient to support debt servicing. Coverage indicators weakened in FY25 compared to FY24. Interest coverage declined to ~3.6x in FY25 from ~5.0x in FY24, while FCFO-to-finance cost reduced to ~2.9x (FY24: ~4.7x). In ~3MFY26, interest coverage further softened to ~3.2x, reflecting lower profitability during the quarter.

The Company continues to operate with a leveraged capital structure. Total borrowings-to-capital stood at ~57.2% in FY24 and increased to ~59.5% in FY25. A significant portion of the debt remains short-term, accounting for ~72.7% of total borrowings in FY25 (FY24: ~69.8%), exposing the Company to refinancing and interest rate risks. The equity base improved steadily, increasing to ~PKR48.9bln as of end-Jun’25 from ~PKR44.8bln as of end-Jun’24, supported by retained earnings. As of ~3MFY26, shareholders’ equity further strengthened to ~PKR49.1bln, providing some cushion against the elevated leverage profile.