Newage Cables (Private) Limited (Newage’ or ‘the Company’) was incorporated on 21st September 1978, as a Private Limited Company. The Company operates as a family-owned entity with over four decades of operating history in Pakistan’s cable manufacturing sector.

Newage Cables is amongst the established cable manufacturers in Pakistan, with its origins dating back to 1956. Over time, the Company has developed integrated manufacturing capabilities and maintains ISO 9001 certification, reflecting adherence to international quality standards. The Company has built a strong institutional footprint, particularly within the power and infrastructure sector.

The Company is engaged in the manufacturing of electric cables. The Company’s process of manufacturing starts with the melting of raw material. The Company’s main raw materials are imported copper and aluminum ingots. The products of the Company include copper & aluminum rods, transmission and distribution conductor cables, specialty cables, control cables, LSZH cables, medium voltage cables, house wiring, and solar cables. The production capacity of copper rod stands at 6,000 MT per year, aluminum rod stands at 44,000 MT per year, PVC compound stands at 8,000 MT per year, and steel wire & strands. Moreover, the Company is able to draw and assemble up to 25,000 km of transmission line conductors, 54,000 km of distribution conductors, and 85,680 km of control cables and wiring.

The Company’s major ownership resides within the family. Major shareholding resides with the Azam brothers, and the remaining stake is held by their sons. Mr. Asim Jalil Azam (39.67%), Mr. Amer Bakht Azam (39%), Mr. Adnan Jalil Azam (7.34%), Mr. Alman Jalil Azam (7.33%), and Ali Amer Azam (6.67%).

Ownership of the Company has remained stable over time, with control retained within the sponsoring family. The gradual integration of the next generation supports continuity in ownership and ensures stability in strategic direction.

The sponsors possess good experience in the cable manufacturing industry, with multi-decade involvement in the Company’s operations. Their longstanding presence in the sector has enabled Newage to sustain its market position and navigate industry cycles.

The sponsors’ financial strength is reflected through the Company’s consistent operational performance, ongoing capacity expansion, and equity base, which stood at PKR 11,197mln as of June 2025 (June 2024: PKR 10,125mln), reflecting continued profit retention and strengthening of the capital base

The Board of Directors is dominated by sponsoring family members and comprises five executive directors: Mr. Asim Jalil Azam (CEO), Mr. Amer Bakht Azam, Mr. Aiman Jalil Azam, Mr. Adnan Jalil Azam, and Mr. Ali Amer Azam. The structure ensures strong sponsor control and continuity in strategic direction; however, the absence of independent directors indicates limited external oversight relative to listed peers.

Mr. Asim Jalil Azam, CEO and Chairman, has over four decades of experience and has played a central role in the Company’s growth. Mr. Aiman Jalil Azam (Director Finance & Sales/CFO) oversees financial management, working capital, and statutory compliance since 2014. Mr. Amer Bakht Azam, with over 30 years of experience and a business degree from the USA, heads manufacturing operations. Mr. Adnan Jalil Azam manages the chemical business segment, while Mr. Ali Amer Azam supports manufacturing operations, ensuring operational continuity and technical oversight.

The Board meets regularly to review operational performance, strategic initiatives, and financial matters. Governance support is provided through formal sub-committees, including the Audit Committee, Management Committee, and Human Resource Committee, which assist in internal oversight, financial review, and policy direction. This structure supports informed decision-making and operational supervision.

The external auditors, ShineWing Hameed Chaudhri & Co., Chartered Accountants, have issued an unqualified opinion on the Company’s financial statements for the year ended June 30, 2025. The firm is QCR-rated and categorized in ‘Category B’ on SBP’s panel of auditors, reflecting adherence to applicable accounting standards and acceptable financial reporting quality.

The Company’s reporting line is divided into two mainstreams. One is business operations, and the other one is manufacturing. Each mainstream is headed by one executive director. Mr. Asim Jalil looks after the business operations while Mr. Amer Bakht looks after the manufacturing. The organizational structure has been optimized as per the organizational needs.

The Company is led by its sponsoring family, with Mr. Asim Jalil Azam having over four decades of industry experience and longstanding association with the Company. The senior management team, including Mr. Amer Bakht Azam (Manufacturing Head), Mr. Aiman Jalil Azam (Finance & Sales), Mr. Adnan Jalil Azam, and Mr. Ali Amer Azam, possess extensive operational experience. Management has demonstrated strong execution capabilities, particularly in maintaining institutional relationships with key public sector clients including WAPDA, NTDC, and DISCOs, which contribute to a significant portion of revenues.

The management has implemented performance-based assessment criteria backed by rigorous KPI streams, which include leadership, managerial, and technical programs, which have been instrumental in fostering a culture of continuous learning. Moreover, proper segregation of duties along with well-defined reporting lines and a hierarchical structure leads to smooth functioning, ensuring informed decision-making.

The Company is continuously looking at ways to optimize systems to ensure proper visibility and monitoring of key metrics and is placing a greater emphasis on reporting through its ERP system. The implementation of ERP modules of payables and receivables & HR has been rolled out and implemented, thus expanding the suite of ERP now in use within the Company.

Newage maintains established internal controls and quality assurance protocols aligned with international standards, supported by periodic audits and process reviews. The Company is ISO-certified and follows stringent quality testing procedures, particularly for high-voltage and transmission cables supplied to government and institutional clients. Management continues to enhance operational efficiency through capacity optimization, indigenous mechanization, and cost control initiatives, including energy cost rationalization through its operational 1MW solar facility.

The cable and wire industry in Pakistan is closely aligned with power infrastructure development, industrial expansion, and construction activity. Demand is primarily driven by public sector transmission and distribution projects, energy infrastructure, and private sector construction. The industry remains inherently exposed to volatility in international copper prices, which are benchmarked against the London Metal Exchange (LME), and exchange rate movements, as raw materials are predominantly imported. Competitive intensity remains high among organized players, including Pakistan Cables Limited and Fast Cables Limited, while a fragmented unorganized segment continues to operate The increasing focus on power infrastructure modernization, renewable energy integration, and export opportunities provide long-term demand visibility for established manufacturers.

Newage Cables maintains a strong competitive position within the domestic cable industry, with an estimated market share of approximately 22.1% in FY25, improving from 18.3% in FY24, positioning the Company among the top three cable manufacturers in Pakistan. Newage’s competitive strength is underpinned by its established institutional relationships, particularly with power sector entities including WAPDA, NTDC, and K-Electric, alongside a nationwide distribution network. The Company’s specialization in transmission and distribution conductors and medium-to-high voltage cables provides a strong niche positioning, though business concentration within the institutional segment exposes it to elongated receivable cycles.

The Company reported net revenues of PKR 35.1bln during FY25, reflecting a substantial increase of approximately 33.7% compared to PKR 26.3bln in FY24, primarily driven by better prices. Revenue growth was largely supported by cables and wiring, contributing approximately 55% of total sales, while transmission and distribution conductors contributed approximately 44%, highlighting the Company’s strong presence in energy infrastructure. The Company also maintains a developing export portfolio, with export-linked sales constituting approximately 30% of revenue, including direct exports and deemed exports to energy projects, which provide foreign currency exposure and partially mitigate exchange rate risk.

Profitability indicators remained stable during FY25, with gross profit margin recorded at approximately 11.9%, broadly consistent with FY24 levels. Net profit margin stood at approximately 3.1%, reflecting continued exposure to raw material price volatility and financing costs. The Company’s margin profile remains inherently linked to copper price movements and its pass-through pricing mechanism, supported by its largely project-based and institutional sales model

The Company’s business profile is supported by its long operating history, established market position, and strong relationships with key power sector clients. Management continues to focus on capacity enhancement, operational efficiency, and export market penetration to strengthen its business profile. However, the Company’s business concentration toward institutional infrastructure clients and limited diversification relative to peers remain key considerations. The Company’s ability to expand its product mix, enhance export penetration, and diversify its customer base will remain important for strengthening its overall business risk profile over the medium term.

The Company’s working capital requirements remain elevated, primarily due to the nature of institutional project-based sales, which are characterized by extended receivable cycles and retention payments. Trade receivables stood at approximately PKR 5.3bln as of FY25, reflecting partial improvement compared to FY24, though aging remains concentrated within public sector clients. Inventory levels remained aligned with operational requirements, reflecting management’s approach to managing raw material procurement amid copper price volatility. Overall, the Company maintains adequate liquidity support through banking relationships and internally generated cash flows, though working capital intensity remains a structural characteristic of the business.

The Company’s Free Cash Flow from Operations (FCFO) improved marginally to PKR 2,317mln during FY25 (FY24: PKR 2,219mln), supported by higher profitability. However, finance costs increased significantly to PKR 1,217mln (FY24: PKR 734mln), primarily due to higher utilization of short-term working capital facilities and elevated borrowing levels amid increased raw material prices. Consequently, interest coverage weakened to approximately 1.9x in FY25, compared to 3.0x in FY24. Nevertheless, coverage levels remain adequate in relation to the Company’s operational scale and cash flow generation capacity.

The Company maintains a moderately leveraged capital structure, with total borrowings increasing to PKR 7,211mln as of June 2025, compared to PKR 5,976mln as of June 2024, reflecting higher working capital utilization. Consequently, the leveraging ratio increased to 39.2% (FY24: 37.1%), though remaining within manageable levels. The borrowing mix remains predominantly short-term in nature, aligned with the Company’s working capital cycle and operational funding requirements. The leveraging profile remains supported by the Company’s equity base of PKR 11.8bln, providing adequate capitalization cushion.