Sarena Textile Industries (Private) Limited ("the Company" or "STIL") is a private limited company incorporated in 1994.

Sarena Textiles Industries (Pvt.) Limited (STIL) serves as the flagship entity of the Sefam Group, a diversified textile conglomerate headquartered in Lahore, Pakistan. The Group is widely recognized for its pioneering role in introducing branded retail to the local market. The Group's origins trace back to Ali Embroidery Mills (Private) Limited, and over the years, it has expanded its footprint across various segments of the textile and apparel value chain. In addition to STIL, the Group's key business interests include Sefam (Private) Limited, which manages its retail operations. Under Sefam, the Group operates a portfolio of retail brands, including Leisure Club, Kayseria, and Shahnameh, catering to diverse consumer segments across Pakistan.

The Company is engaged in the manufacture and sale of fabrics and garments used for fashion and workwear, with production operations divided into three main units: weaving, processing, and stitching/apparel. The Company offers a variety of special fabric finishes, such as Fire-Retardant Finish, Antistatic Finish, Chemical Protection Finish, etc., and is the only Licensee in Pakistan for PROBAN®. PROBAN® is a quality-controlled technological process that gives cotton and cotton-rich woven and knitted textiles flame-retardant properties that are durable for long-term use. The total energy requirement of the Company stands at 7MW, out of which 2MW is currently met through solar energy, while the remaining 5MW is fulfilled through LESCO, SNGPL, solid fuel captive power, and diesel generators.

The shareholding structure of Sarena Textile Industries (Pvt.) Limited has undergone a transition. Mr. Hamid Zaman transferred 30.0% of his ownership stake within the family and associated foundation. Post-restructuring, Mr. Hamid Zaman retains a majority shareholding of 53.34%. The remaining ownership is distributed among family members and the Zaman Foundation, with Ms. Sarah Zaman, Mr. Mustafa Ahmad Zaman, Waleed Ahmed Zaman, Omar Badi Zaman, Bilal Ahmed Zaman, and Zaman Foundation each holding a 5.0% stake. The residual of 16.66% is equally divided between Mr. Tariq Zaman and Ms. Ambreen Zaman.

The Group has formalized its structure in alignment with the current management framework. The intra-family transfer of ownership stake reflects a formalized succession planning process and enhances continuity and stability within the Company’s ownership structure. Moreover, the active involvement of the second generation in the strategic direction of the business further augurs well for the Company’s long-term prospects.

The sponsor Group possesses extensive experience and expertise in the textile and retail industries and is widely regarded as a pioneer in introducing the concepts of brand in Pakistan. In addition to its core textile operations, the Group has also diversified into sectors such as corporate farming and energy through small-scale ventures.

STIL exhibits strong financial resilience, supported by a solid net worth and a consistent track record of sponsor backing.

Following the demerger, the governance framework transitioned, with the Company Board now comprising sponsoring family members Mr. Hamid Zaman and Mr. Tariq Zaman, along with Mustafa Ahmad Zaman (Group CEO) and Omar Badi Zaman. The induction of independent directors will further enhance the Company’s overall governance.

Mr. Hamid Zaman brings significant textile industry experience and a strong educational background from a prestigious university. His leadership, coupled with the active engagement of the second generation in strategic affairs, signals positive continuity for the Company.

There are formal board committees to assist the board on different matters. The board members are the primary sponsors of the Company. They ensure their availability and provide valuable insights and guidance whenever needed in the day-to-day operations of the business.

The Company has appointed Riaz Ahmad & Co. Chartered Accountants, as its external auditor. The firm is listed in the "A" category on the State Bank of Pakistan's panel of auditors. The auditor expressed an unqualified opinion on the audited financial statements for FY24 (June year-end).

The Company maintains a lean organizational structure to promote operational efficiency and effective communication. Key departments include: (i) Accounting, (ii) Finance, (iii) Human Resources, (iv) Marketing, (v) Research & Development, (vi) Dyeing, and (vii) Weaving. The Group CFO reports directly to the Group CEO, while all functional department heads report to the CEO.

The Group’s leadership is spearheaded by Mr. Mustafa Ahmad Zaman, who serves as the Group CEO of Sarena Textile Industries (Pvt.) Limited and Sefam (Pvt.) Limited. He brings with him over 20 years of professional experience, supported by a seasoned and skilled management team. Mr. Asif Masood, the CEO of the Company, has been associated with the Sarena Company for more than 27 years and brings extensive experience in the textile sector. The financial leadership is overseen by Mr. Shahzad Sarfraz Khan, the Group CFO, who also brings over 20 years of professional experience in financial management and strategic planning. Recently, Mr. Adnan Hassan has joined as the Chief Operating Officer (COO) of the Company. He possesses 15 years of industry experience, adding further depth to the operational leadership.

The Company has a formal management committee structure in place. Committee meetings are held on a monthly basis and are attended by relevant functional heads and key management personnel to ensure effective decision-making and operational oversight.

Sarena Textile deploys SAP ECC6 as their primary ERP solution, in addition to having Oracle (modified in-house) and S-Track, which is an in-house developed software. The Company has a comprehensive MIS in place with regular generation of reports to aid informed and timely decision-making.

Sarena Textile has an ISO17025 accredited Quality Assurance Lab and is the only Licensee in Pakistan for PROBAN®, a quality-controlled technological process that gives cotton and cotton-rich woven and knitted textiles flame retardant properties.

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.

Sarena Textile is an established leader in Pakistan's textile industry. The Company achieves higher margins than local competitors, primarily due to its strategic focus on the workwear niche, which enables a premium, value-added product mix.

The Company maintains a well-diversified sales portfolio across both local and export markets. In FY24, revenue increased to PKR 32.2bln (FY23: PKR 31.6bln), with exports contributing 74% of total sales and the remaining 26% generated from local operations. The Company’s core product portfolio is led by dyed and printed fabric, with workwear garments forming the secondary yet strategically significant segment. Notably, workwear garments represent the highest-margin offering and hold a leading position in the Company’s value contribution framework. During 9MFY25, the topline recorded a modest growth of 3.2%, reaching PKR 26.85bln (9MFY24: PKR 26.01bln). 

During FY24, the margins reflected a downward trend. Gross and operating profit margins declined to 15.9% and 6.6% respectively (FY23: 19.5%, 10.5%). Whereas, the net profit marginally declined to -2.5% from 7.7% in FY24, due to a sizeable increase in Finance cost and elevated energy expense. During 9MFY25, STIL has undertaken a strategic shift in its business approach, focusing on sustainable profitability over mere top-line growth. As part of this repositioning, the Company has rationalized its client portfolio and restructured product pricing in USD terms to protect and enhance margins. This strategic shift is also reflected in the Company’s financial performance during 9MFY25, where, despite limited revenue growth, margins improved significantly (9MFY25; G.P margin: 21.1% & N.P margin: 4.6%) , resulting in a PAT of PKR 1.23bln, compared to PKR 35mln in 9MFY24 and a net loss of PKR 802mln in FY24. The Company’s finance cost decreased and was recorded at PKR 1.4bln due to a gradual reduction in the policy rate over the last few quarters. 

In the upcoming year, capacity utilization levels are expected to improve further to support the growth momentum envisioned by the management. In line with evolving demand patterns in the workwear and fashion segments, the Company plans to strategically outsource certain operations to ensure timely delivery and operational efficiency. Its global strategic brands, Sarena® PROBAN® and Blaze Block®, which serve critical industrial sectors, further strengthen market positioning and enhance overall business resilience. The Company has undertaken renewable energy initiatives aimed at creating a cushion in its cost structure by optimizing energy expenses. The Company is currently generating 2MW of electricity through its operational solar power system. As part of its ongoing commitment to sustainable energy development, it has embarked on a project to enhance its solar capacity to 4MW. The installation of the additional 2MW is underway and is expected to be completed within the next six months.

The Company’s net cash cycle experienced a slight increase, rising to 105 days in 9MFY25 from 103 days in FY24. The primary reason for this increase was a reduction in trade payable days, which declined to 27 days in 9MFY25 from 35 days in FY24. The short-term borrowings / total borrowings increased to 89.3% in 9MFY25 (FY24: 85.6%). The short-term trade leverage sizably inclined in 9MFY25 clocked in at 9.3% (FY24: 5.0%) reflects adequate room to borrow. As of 9MFY25, the Company’s liquidity position improved, with the current ratio standing at 4.1x(FY24:3.6x).

During FY24, there is a sizable decrease in the Company's free cash flows from operations, mainly due to a loss after tax. Free cash flows from operations clocked in at PKR 2.3bln, compared to PKR 4.4bln in FY23. The interest coverage for the period declined to 1.0x (end-Jun23: 3.2x) while core debt coverage amounted to 0.8x (FY23: 2.3x). During 9MFY25, FCFO clocked to PKR 3.0bln, whereas the Company’s interest coverage was recorded at 2.4x owing to improvement in the overall profitability matrix.

In 9MFY25, the Company’s leverage ratio stood at 60.5% (FY24: 60.7%). Short-term borrowings witnessed a rise due to an increase in working capital needs. Similarly, long-term borrowing displayed a downward trend on a YoY basis. The equity base of the company increased to PKR 8.9bln (end-Jun24: PKR 7.7bln), attributable to accumulated profits.