Nishat Mills Profit up 15% in 4QFY25
Nishat Mills Limited (NML) recorded unconsolidated profit of Rs1,174 million (EPS: Rs3.34) in 4QFY25, up 15% YoY, compared to earnings of Rs1,021 million in 4QFY24 (EPS: Rs2.90). The result came in lower than expectations due to lower-than-expected sales and a higher-than-expected effective tax rate.
Net sales rose 9% YoY while falling 4% QoQ to Rs43bn in 4QFY25. We await detailed accounts to gain clarity on the breakup of these sales.Gul Ahmed Textile Mills Closes Export Apparel Business
The result came lower than expectations, also due to a higher-than-expected effective tax rate of 49% for 4QFY25 (2.54% of turnover). The effective tax rate was 49% in 4QFY24 (2.45% of turnover) and 63% in 3QFY25 (2.64% of turnover).
Gross margins rose to 11.0% in 4QFY25 as compared to 10.5% in both 4QFY24 and 3QFY25,” Topline said.
Other income decreased by 15% YoY while up 20% QoQ to clock in at Rs2.2bn, which is in line with expectations, mainly due to dividend income received from subsidiaries. Distribution expenses increased by 30% YoY and 7% QoQ.
This takes FY25 earnings to Rs6.0bn (EPS: Rs17.10), down 6% YoY compared to Rs6.4bn (EPS: Rs18.11) in FY24.
Despite an 11% YoY increase in net sales and an improvement in gross margins from 10.8% in FY24 to 11.2% in FY25, operating profits fell by 10% which was due to higher expenses and lower other income. A 19% reduction in finance cost provided some relief; however, a 7% YoY increase in taxation—driven by a higher effective tax rate (43.8% in FY25 vs. 40.7% in FY24)—ultimately led to a 6% fall in PAT.
The company also announced a cash dividend of Rs 2.0/share, equivalent to an 11.7% payout ratio (vs 16.6% in FY24), which was lower than expectations. NML is trading at a FY26E/FY27F PE of 9.1/7.9x.
