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 251,808 spindles, 931 looms, 10,320 rotors, 4 rotary printing machines, 11 digital printing machines, 6 thermosol dyeing machines and 5,212 stitching machines. Overall, Nishat Mills operates with 36 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 3.5trln, diversified across multiple economic sectors — a testament to the sponsor's solid financial standing. The strength of NML is further supplemented by its status as a Holding Company, with a consolidated equity base of PKR 157.8bln and a consolidated topline of PKR 212.5bln.

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 24 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 50 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 40 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. During FY24, five 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, 2024. 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 41 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.

The textile exports of the country reached USD 16.7bln in FY24, a slight increase from USD 16.5bln in the previous year, reflecting 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 8MFY25, the textile exports stood at USD 12.2bln. Pakistan's exports to the USA were USD 4.02bln in FY24 and USD 2.83bln in 8MFY25. Recently, the USA imposed a 29.0% tariff on Pakistani exports. The subsequent impact on the broader dynamics of Pakistan's textile industry, as well as the adaptability of textile manufacturers, will be assessed in due course.

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

The Company’s revenue stream is predominantly export-oriented, with a significant contribution from domestic sales. Leveraging its diversified product portfolio and operational strengths, the Company is strategically focused on expanding into high-value segments, particularly, technical fabric and denim business segments. This initiative is aimed at clinching the evolving global demand, enhancing product differentiation, and reinforcing the Company’s competitive positioning in the international market. During 1HFY25, the Company’s topline experienced an upswing by 16.1% on a quarter-on-quarter basis, clocking at PKR 89.4bln (1HFY24: PKR 76.9bln). Despite a challenging global economic environment, the Company successfully maintained its sales volumes, underpinned by strong business fundamentals. Each operating segment of NML is managed as an independent profit center, with its performance evaluated individually on an absolute basis. The Company has established a diverse and stable clientele around the globe. The export sales have been distributed across several regions, with Europe accounting for 46.6%, contributing PKR 22.5bln to the topline during 1HFY25. This is followed by Africa, Asia, and Australia, which together make up 32.3% of sales at PKR 15.6bln, and America contributing 21.1% at PKR 10.2bln, indicating a low geographic concentration risk. The top ten customer concentration for the export sales stands at 28% for all operating segments, remaining in a comfortable range. Additionally, the Company enjoys a long-term association with the top international brands of the world, including J.K.N. International, Levi's, CFL Enterprise Limited, MBM Garments Limited, J.C. Penney Company Inc., and a few others. The product-wise analysis reveals that the Yarn and Grey Cloth were the Company's prime products in 1HFY25, contributing PKR 27.9bln and PKR 18.4bln to the total revenue. They were followed by Processed Cloth and Madeups reported at PKR 16.2bln and PKR 13.1bln respectively.

In 1HFY25, the Company’s profit margin went down to 11.8% (1HFY24: 12.1%). The key factors influencing the overall cost structure and profitability matrix include USD exchange rate stability, product price dynamics, rising energy tariffs, revision of minimum wage and an increased tax burden resulting from the transition of export-oriented units from the FTR to the NTR. Due to intensive working capital requirements, the Company’s finance cost stood at PKR 4.5bln (1HFY24: PKR 5bln) despite a gradual decrease in the key policy rate. Consequently, the Company’s net profitability clocked at PKR 4.1bln (1HFY24: PKR 5.6bln). Hence, the Company’s net profit margin stood at 4.6% (1HFY24: 7.3%).

On the strategic side, the denim and technical fabric units have been commercialized with the management anticipating a healthy contribution to the topline during the upcoming years, supplemented by a robust pipeline of international orders. 

The Company’s working capital requirements are a function of its inventory days and trade receivables days, for which the Company relies on a mix of internal generation and short-term borrowings (STBs). As of end-Dec24, the Company’s net working capital cycle was stretched to 128 days (end-Jun24: 102 days), attributed to an extended inventory cycle recorded at 96 days (end-Jun24: 82 days), which is a peak seasonal impact.

At end-Dec24, the Company’s free cash flows from operations stood at PKR 5.8bln (end-Jun24: PKR 10.0bln). Due to a consistent decline in the policy rate, the interest burden arising from the debt matrix has shown an improvement. Resultantly, the Company’s interest coverage and core operating coverage inched up to 1.3x (end-Jun24: 1.0x) and 0.9x (end-Jun24: 0.7x). Looking ahead, the improvement in the coverages of the Company remains essential.

The Company maintains a moderately leveraged capital structure. As of end-Dec24, the Company's debt book reflected an upward trend and stood at PKR 96.3bln (end-Jun24: PKR 77.8bln) to fuel the extensive working capital requirements following a robust increase in topline. Accordingly, the total leveraging increased marginally (end-Dec24: 43.4%; end-Jun24: 40.4%). The Company’s equity base strengthened further to PKR 125.7bln (end-Jun24: PKR 114.8bln), primarily supported by sustained profitability. The Company's debt matrix is dominated by short-term borrowings, which account for 72.5% of the total debt, clocking at PKR 69.8bln (end-Jun24: PKR 49.7bln).