Masood Textile Mills Limited (“MTM” or “The Company”) is a public limited company incorporated in 1984 under the Companies Act, 1913 (now Companies Act, 2017) and listed on the Pakistan Stock Exchange (“PSX”) in 1988.

The Company was initially a spinning Company acquired from Mehmood Group in 1984. MTM after the inclusion of Chinese investors as strategic partners grew into a truly vertically integrated textile unit focusing on exports of value-added highly fashioned products.

The principal business activity of the Company is the manufacturing and sale of cotton / synthetic fibre yarn, knitted and dyed fabrics, and garments. The Company’s vertically integrated operations—spanning 19,968 spindles for diverse yarns, 853 active and 143 seasonal knitting machines, and 4,500 stitching machines—demonstrate strong production scalability. The Company’s total energy requirement stood at ~17 M.W, which is primarily met through FESCO and captive generators and solar power plant of 6.4MW. The registered office of the Company is situated in Universal House, 17/1, New Civil Lines, Bilal Road, Faisalabad.

The Company's ownership is concentrated among a few major shareholders. Ms Nazia Nazir w/o Mr Shahid Nazir Ahmad has an ownership stake of ~ 30.17%, Chinese investors cumulatively hold a 37.09% stake. Directors hold a minimal 2.39%. The remaining shareholding mainly vests with Joint Stock Companies (10.86%), National Bank of Pakistan (6.72%), NIT and ICP (3.29%) & general public (9.48% ).

The sponsors have a long-term association with the Company and the textile business. A formal documented succession plan will augment the ownership framework of the Company.

Mr. Shahid Nazir Ahmad, CEO of Masood Textile Mills Limited, has been instrumental in transforming the Company from a spinning unit into Pakistan’s leading vertically integrated textile enterprise. His strategic leadership, backed by deep expertise in production, IT, marketing, and administration, has driven the Company’s sustained growth and operational excellence.

MTM financial stability stems from its disciplined single-line-of-business strategy, supported by long-term sponsor commitment. As a dedicated textile exporter, MTM has built enduring partnerships with leading global brands, ensuring consistent revenue streams and operational efficiency.

The Board is composed of seven members, including the Chairman and Chief Executive Officer. Among them, three serve as Nominee Directors—one representing NIT and two representing Shanghai Challenge Textiles Co. Ltd.—while two are Independent Directors. The inclusion of independent oversight has significantly enhanced the Company's corporate governance framework.

The Board of Masood Textile Mills Limited (MTM) comprises seasoned professionals with expertise in technology, textiles, finance, and global business. The Chairman Mr. Naseer Ahmad Shah, an IT expert with 38+ years in ERP systems, provides strategic oversight. CEO Mr. Shahid Nazir Ahmad, an MBA from London, has driven MTM’s growth into a leading vertically integrated textile enterprise. Nominee directors Ms. Chen Yan and Mr. Shibin Yang (Shanghai Challenge Textile Co. Ltd) contribute 20+ years of international textile leadership. Mr. Shoaib Ahmad Khan (National Investment Trust) adds banking and Islamic finance expertise, while Mr. Shahid Iqbal and Mr. Malik Shahid Mehmood bring decades of experience in finance, marketing, supply chain, and corporate strategy.

The Board holds quarterly meetings with consistent participation from all members, reflecting their strong commitment to strategic oversight. Detailed minutes are diligently documented to ensure transparency and accountability. To support effective decision-making, the Board is assisted by four specialized sub-committees: the Audit Committee, Risk Management Committee, the Nomination Committee, and Human Resource & Remuneration and Sustainability Committee.

Riaz Ahmad & Company Chartered Accountants are the external auditors of the Company. The auditor is listed in Category “A” of the State Bank’s panel of auditors. They have expressed an unqualified opinion on the financial statements of the Company for the year ended 30 June 2025. The Company also has an in-house internal audit function.

The organizational structure demonstrates a clear hierarchy and a strong governance framework. The Board of Directors, led by the Chairman, provides strategic oversight, while the CEO manages core business functions. Key departments—Finance, HR, Marketing, Supply Chain, and Production—report directly to the CEO, ensuring streamlined operations. The CFO oversees financial planning, taxation, and MIS, while the Head of Production manages vertically integrated units: Processing, Apparel, Spinning, and Knitting. Independent Internal Audit enhances control and accountability.

The management team is headed by the CEO, Mr. Shahid Nazir Ahmad. He is supported by a highly trained, qualified, and experienced team. Mr. Tanveer Ahmad Siddiqui, CFO, is a seasoned finance professional with 32 years of experience. He completed his CA articles in 1990 with Riaz Ahmad & Co Chartered Accountants, and holds an MBA in Finance and a B.Com from the University of the Punjab. He plays a vital role in ensuring the Company’s financial stability.

The management meetings are held periodically with a prime focus on the status of projected targets and feedback on the development and implementation of business strategies.

The Company has developed an in-house centralized database system- ERP (enterprise resource planning) for systems integration. The systems mainly categorized under the umbrella of ERP are Financial Accounting systems, Quality management systems, machine management systems, inventory management & production management systems etc.

MTM produces each garment with a unique ID tracking number which is attached inside the garment, and it backtracks from cotton crop type, yarn, knitting, fabric processing, cutting, stitching operations & inspections to packaging and shipment. The Company has adopted LEAN Manufacturing best practices in its production facility by using RFID (Radio Frequency Identification) technology in its production lines. This RFID technology helps real-time production activity and item tracking.

Textile exports reached USD 17.9bln in FY25, a modest rise from USD 16.7bln the previous year, reflecting a 7.2% year-over-year growth. The largest contribution came from the composite and garments segment, at USD 14bln, which included the weaving segment at USD 1.8bln and the spinning segment at USD 0.7bln. The production of cotton cloth in FY25 declined by approximately 0.7% year over year, reaching around 877.1mln square meters. During FY25, about 25.3% of the cotton cloth produced was exported (compared to roughly 27.2% in FY24), with the rest used for the domestic market. The country's fabric exports fell by approximately 4.4% in FY25 (FY24: up about 5.8% YoY), with approximately 23.4% of Pakistan's cotton cloth exports going to Bangladesh (compared to about 19.9% in FY24), followed by the USA with about 8.1% of cotton cloth exports (compared to approximately 7.8% in FY24). In FY25, the transition from the final tax regime to the normal tax regime is expected to affect the profitability of export-oriented units, with a 29% tax on profits and a super tax of up to 10%. The recent removal of GST exemption (Finance Bill, 2025) on textile inputs for exporters registered under the Export Facilitation Scheme (EFS) will offer tax protection and create a level playing field for domestic cotton and yarn producers. Currently, international cotton prices are higher than the price of locally produced cotton. The gap has widened to approximately 9.8 cents per pound (as of July 18, 2025), resulting in an average increase of about USD 36.8 per bale of imported cotton. A greater reliance on imported cotton could Lead to higher raw material costs, ultimately impacting yarn prices and profit margins for the sector. Conversely, energy and finance costs are expected to stay within a range, given the projected reduction in interest rates and the absence of any major energy tariff increases. Considering the current climate change, flooding in major cotton regions, and shifting crop patterns, the target of approximately 10.2mln bales for FY26 appears challenging.

The Company has established its foot prints in the textile product market over a period of ~ 04 decades.

MTML’s topline remains heavily concentrated in the export segment, reflecting its strong international market positioning. During FY25, the Company reported a topline of PKR 59.2bln, registering a modest growth of ~1.0% YoY (FY24: PKR 58.6bln). This increase was primarily driven by higher export sales which rose by 10% to PKR 50.6bln in FY25 (FY24: PKR 46.0bln), indicating improved sales and sustained demand in key international markets. The Company’s export sales are geographically diversified, with the United States, retaining the largest export destination, followed by Germany, Sri Lanka, and other international markets. This diversified presence across key regions supports revenue stability and reflects MTML’s strong penetration in global markets. Customer concentration, however, remains notable, with JC Penney Purchasing LLC continuing to be the Company’s largest buyer. During 9MFY26, the Company reported a topline of PKR 36.4bln (9MFY25: PKR 44.5bln), reflecting a decline of ~18% due to the imposition of reciprocal tariffs by the USA.

During FY25, the Company’s gross margin contracted to 15.2% (FY24: 16.2%), primarily attributable to an uptick in salaries, wages, and employee benefits. Similarly, the operating margin settled at 7.4% (FY24: 9.1%). The Company’s finance cost declined to PKR 3.8bln (FY24: PKR 5.0bln), primarily due to monetary easing by the State Bank of Pakistan. Consequently, the Company posted a net profit of PKR 131mln in FY25, translating into a net margin of 0.2% (FY24: -0.8%). The turnaround at the net level is largely underpinned by the reduction in finance costs. As of 9MFY26, despite the decline in revenue, the Company’s profitability profile improved, with gross and net margins expanding to 17.6% and 1.7%, respectively, reflecting gradual margin accretion driven by enhanced cost rationalization measures and improved operational efficiencies. Going forward, the Company’s ability to optimize its cost base and sustain operational efficiencies will remain critical to preserving profitability and supporting margin sustainability.

A biomass power plant is already operational, and a 3.2MW solar power project is currently in progress, complementing the existing 6.4MW captive power generation capacity which will further optimize energy cost. The Company is focused on the rapid development and introduction of new and improved products through a disciplined and customer-centric approach.

The Company’s working capital requirements are met through a combination of internal cash generation and bank borrowings. Net working capital days elevated to 152 days (FY24: 145 days), primarily due to increased inventory holding period. Trade payable days declined to 36 days (FY24: 41 days), while trade receivable days slightly improved to 92 days (FY24: 96 days). As of 9MFY26, working capital cycle stood at 198 days.

During FY25, the Company generated FCFO of PKR 5.03bln (FY24: PKR 6.1bln), reflecting a moderation in internal cash flow generation. Accordingly, the Company’s interest coverage ratio improved to 1.4x (FY24: 1.3x), while the debt service coverage ratio (DSCR) remained constant at 1.0x (FY24: 1.0x). As of 9MFY26, the Company’s FCFO stood at PKR 3.4bln (9MFY25: PKR 3.3bln), primarily driven by an increase in profit before tax. Coverage metrics also showed relative improvement, with interest coverage and DSCR standing at 1.6x and 1.1x, respectively, indicating stabilization in cashflow generation.

The Company’s equity base marginally strengthened to PKR 17.1bln as of FY25 (FY24: PKR 16.6bln). The Company continues to operate with a highly leveraged capital structure, with the debt-to-capital ratio elevating slightly to 60.7% (FY24: 60.1%). The funding profile remains predominantly reliant on short-term borrowings, which stood at PKR 22.6bln (FY24: PKR 22.1bln), primarily utilized to finance ongoing working capital requirements. As of 9MFY26, the Company’s equity base stood at PKR 17.6bln, with leveraging of 60% and short-term borrowings amounting to PKR 23.4bln.