2. BRIEF INTRODUCTION OF NISHAT MILLS LTD
Nishat mills is one of the largest textile company in Pakistan.
Vertically integrated structure of the company.
Involved in almost the entire value chain of Pakistani
textile sector.
Large production capacity equipped with 198,120 spindles, 655
Toyota air jet looms ad 40Sulzer shuttle-less looms.
In-house power generation capability of 89MW.
Cotton and blended yarn capacity of 185 tons /day.
Nishat mills has successfully maintained its status for more than
fifty years on Karachi stock exchange.
Associated with a conglomerate, Nishat group.
3. Turnover Nishat mills Ltd
(Rs.) million
Gul Ahmed ltd
(Rs.) million
FY12 44,924 25,064
FY11 48,565 25,435
FY10 31,536 19,689
Gross Profit % Nishat mills Ltd Gul Ahmed ltd
FY12
15 14
FY11
16 18
FY10
19 16
PROFITABILITY AND SALES
4. Net Profit Margin Nishat mills Ltd Gul Ahmed ltd
FY12 8 -1
FY11 10 5
FY10 9 2
PROFITABILITY
5. Creditors
Collection
Period
Nishat mills
(days)
Gul
ahmed
(days)
Stock turnover
Nishat mills
(days)
Gul
ahmed
(days)
FY12
31.85 41.00
FY12
93.52 150.53
FY11
22.71 45.04
FY11
71.30 134.00
FY10
29.94 32.40
FY10
72.51 97.57
Acid-Test
Ratio
Nishat
mills
Gul
ahmed
Debtors
Collection
Period
Nishat
mills
(days)
Gul
ahmed
(days)
FY12
0.60 0.24
FY12
24.25 29.89
FY11
0.50 0.20
FY11
16.99 31.50
FY10
0.47 0.34
FY10
19.34 45.34
LIQUIDITY
6. Return on Capital Employed (%) Nishat mills Ltd Gul Ahmed ltd
FY12
14 21
FY11
18 38
FY10
13 28
INVESTMENT RETURN
7. Debt to Equity Nishat mills Ltd Gul Ahmed ltd
FY12 0.09 0.47
FY11 0.08 0.47
FY10 0.09 0.62
FINANCIAL RISK PROFILE
8. Strengths Weaknesses Opportunities Threats
Reasonable
credit ratings by
PACRA
Falling revenues
of value addition
products in FY11
Devaluation of
the Pak rupee
Depressed
economies of
euro peon union
and USA
Efficient raw
cotton
procurement
Fall in profits by
31% in FY12
Arrangement of
Pakistan's textile
expo
Cotton being
attracted into
China
Power generation
associates
Low contribution
of high value
addition products
in sales
Expected lifting of
euro peon union
trade restrictions
On going energy
crisis
In the country
50 years of KSE
listing
China largest
exporter of textile
internationally
loses exports
Decline in
Punjab’s cotton
production
FPCC export
performance
award
Reduction in
cotton cultivation
area in Pakistan
ISO-9001
certified
SWOT ANALYSIS
9. Threats from new
entrants is low due to
investment costs
large number of
producers locally
and INT.
Threat from
substitutes is low-
medium given the co-
existing producers of
similar products in the
industry have been
always present
United under different
associations of ginners
bargaining position is low
until now, may shift to
high
Numerous options
available keeps
bargaining position
of customers to high
Competition and rivalry
is high due to large
number of competitors
locally and
uncompetitive ness of
Pakistan textile
exports
Porter’s Five Forces Model
10. Conclusion:
Nishat mills’ revenue falls in FY12
Low contribution of highly value added products in the company’s revenue
stream
Association with power generation companies supports the company’s
operational capacity
Efficient working capital management of Nishat mills
Improving international cliental
Not involved in the ginning of cotton
Future outlook:
European Union thinking over GPS-plus status for Pakistan's textile sector
Bangladesh improving its market shares, getting ahead of Pakistan in the
international markets
The energy crisis in Pakistan seems never ending
Raw cotton and yarn exports of Pakistan expected to rise
Under pressure profitability of the textile sector is still alarming
Conclusion and Future Outlook
