Nishat Chunian Limited Reports Strong Financial Turnaround Amid Expanding Market Strategy

Lahore: Nishat Chunian Limited (NCL) announced a significant improvement in its financial performance for the fiscal year 2024, with an increase in revenue and a return to profitability, during a corporate briefing session. The company reported a revenue of PkR88.8 billion, a 24% rise compared to the previous year, driven largely by increased sales in its spinning and weaving divisions.

According to AKD Securities Limited, NCL recorded a net profit after tax (NPAT) of PkR693 million for FY24, a notable reversal from the net loss of PkR998 million in FY23. This positive shift is attributed to improved gross margins, which increased to 12% from 10% the previous year, and higher sales figures. The company’s spinning and weaving divisions contributed significantly to this growth, with sales reaching PkR11.4 billion and PkR55.1 billion, respectively.

Domestic sales played a crucial role, making up 69% of the revenue in the weaving division and 71% in the spinning division. NCL’s operational efficiency was highlighted by high utilization rates of 99% in spinning and 89% in weaving. The company’s energy needs are primarily met through a coal-based power plant, which accounts for approximately 50% of its power mix.

Looking ahead, NCL plans to enhance its spinning division’s capacity and install new looms in the weaving division. The company is also exploring new markets in Malaysia, Turkey, and Bangladesh, aiming to capitalize on favorable tariffs due to geopolitical tensions between the USA and China. Furthermore, the company is strengthening its local market presence and reducing debt, with short-term and long-term borrowings declining by 3% and 21%, respectively, during FY24.

NCL has set a sales revenue target of PkR100 billion for FY25, despite challenges posed by political instability and tax implications. The company is focusing on operational efficiency and gross profits to mitigate these challenges and is optimistic about its strategic market entry and cost-efficient cotton procurement boosting future profitability.

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