Nishat Mills Reports Strong Fourth-Quarter Profit Growth, Declares Dividend

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Business

Nishat Mills Reports Strong Fourth-Quarter Profit Growth, Declares Dividend

September 30, 2026

LAHORE: Nishat Mills Limited (NML) reported a 35% year-on-year increase in its fourth-quarter earnings per share, reaching Rs4.52, which represents a 2.9 times increase compared to the previous quarter. The company's results surpassed expectations primarily due to reduced finance costs and increased net sales.

According to JS Global, NML achieved an unconsolidated profit of Rs1,590 million in the fourth quarter of fiscal year 2026, compared to Rs1,174 million in the same period the previous year. The company announced a cash dividend of Rs2 per share for FY26, maintaining the same level as last year.

NML's finance costs fell to Rs985 million in the fourth quarter, marking a 50% decrease year-on-year and a 43% decrease quarter-on-quarter, attributed to low-cost borrowings. This reduction brought the FY26 total finance costs to Rs6.4 billion, a 24% decrease from the previous year.

Despite global geopolitical challenges and anticipated stagnant sales growth, NML recorded sales of Rs48.3 billion in the fourth quarter, an 11% year-on-year and 4% quarter-on-quarter rise, exceeding expectations. The FY26 net sales reached Rs181.6 billion, a 2% increase year-on-year, driven mainly by the spinning segment.

The company's effective tax rate in the fourth quarter was 34%, compared to 48% in the same quarter of the previous year, leading to a FY26 effective tax rate of 20%, down from 44% in FY25. Gross margins for the fourth quarter rose to 9.6%, slightly higher than the previous quarter but lower than the same period last year. FY26 gross margins stood at 9.8%, compared to 11.2% in FY25.

Other income decreased by 6% year-on-year but increased by 40% quarter-on-quarter to Rs2 billion. For FY26, other income was Rs7.2 billion, a 30% year-on-year decline. The company's FY26 earnings totaled Rs5.5 billion, a 9% decline from Rs6 billion in FY25, primarily due to reduced margins and lower other income.

JS Global maintains a 'BUY' recommendation on NML, noting that the company is trading at a FY27 estimated price-to-earnings ratio of 7.8 times.