Tata Textile Mills Limited (‘Tata Textile’ or ‘the Company’) was incorporated in 1987 as a public limited company under the repealed Companies Ordinance, 1984 (now called the Companies Act, 2017). The Company's shares trade on the Pakistan Stock Exchange (PSX) with a symbol of TATM.

During the 80s, Tata Pakistan took over the management of Island Textile Mills Limited and Salfi Textile Mills Limited and gained recognition in the spinning segment. Later, Tata Textile was established, and during 2020-21, Salfi Textile Mills, Island Textile Mills, along with Tata Energy, were merged with and into Tata Textile.

The Company is engaged in the manufacturing and selling of different varieties of cotton yarn. The Company has six manufacturing units with a cumulative installed capacity of 132,180 spindles. The Company's registered office is located in Karachi. The manufacturing units are located in Karachi, Kotri & Muzaffargarh.

Major  shareholding of the Company vests with the Sponsoring family (76.4, out of which Mr. Shahid Anwar Tata and Mr. Adeel Tata holds ~51.49% and 8.15% stake, respectively. The remaining stake resides with the Public sector companies and corporations (~6.2%), mutual funds (~5.2%), and the general public (~12.66%).

The Company's ownership structure is expected to remain stable. The third generation is gradually inducted into the business with defined roles and responsibilities; however, a formal succession plan needs attention.

The Sponsors hold decades of related experience and have witnessed numerous business cycles. This bodes well for the overall decision-making process for the Company.

Requisite oversight and financial support from the sponsors ensure the Company's financial strength.

Tata Textile control vests with a seven-member Board (BoD), including the CEO. The BoD comprises two Executive Directors, including the CEO, two Non-Executive Directors, including a female Director, and three Independent Directors. The BoD holds considerable independence and gender diversity.

Mr. Mazhar Valjee chairs the BoD with over three decades of professional experience. Mr. Farooq Advani, an Independent Director, is a seasoned finance executive with 49+ years of leadership in financial management, strategy, and corporate governance across multiple industries. The BoD possesses diversified expertise and has a long-standing association with the Company.

The BoD gathers support from two sub-committees, Audit and Human Resources. During FY25, the BoD met four times, while the Audit and HR Committees met on a quarterly and semi-annual basis, respectively. All meetings were held with a majority attendance.

The Company has appointed M/s. Yousuf Adil, Chartered Accountants, as the external auditors. The firm has expressed an unqualified opinion on the Company's financial statements for the year ended June 25. The firm is QCR rated and is among the category "A" listed auditors of the SBP's Panel.

Tata Textile operates through Operations, Sales and Marketing, Supply Chain, Procurement/Sourcing, Admin & Security, Legal, HR, and IT. All departmental Heads, except the CFO and finance head, report to the COO, who reports to the CEO. The CFO reports to the CEO and to the BOD. The CEO, in concert with the BoD, makes pertinent decisions. Head of legal and Company Secretary Reports to the CEO and the Board of Directors. However, the Heads of Internal Audit and HR report functionally to the respective BoD committee and administratively to the CEO.

The CEO, Mr. Shahid Anwar Tata, has over 4 decades of professional experience. The CFO, Mr. Zaid Kaliya, has over two decades of professional experience. He has been associated with the Company for three years. They are supported by a team of experienced professionals.

Management's decision-making process is managed through monthly meetings of all departmental Heads. Performance reviews of all units are conducted during these discussions. However. there is no formal management committee in place.

Tata Textile has deployed a cloud-based Oracle Fusion ERP, an integrated solution for all MIS requirements. The Company has a formal reporting mechanism to address management’s needs, comprising daily, weekly monthly reports through data analytics & dashboard.

Tata Pakistan is ISO-9001 compliant, awarded OEKO Tex Standard 100 Certifications and a Cotton USA License. The Company has placed an in-house internal audit function to monitor the policy formation and implementation process.

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 holds an installed capacity stands at 132,180 spindles and stands among medium-tier players of the industry.

Tata Textile Mills reported net revenue of PKR 41.2bln in FY25, representing a decline of approximately 10.0% compared to PKR 45.8bln in FY24. This reversal is particularly notable given the strong 31% growth the Company had achieved in FY24. In FY25, gross local sales surged to approximately PKR 42bln, while direct export revenues declined sharply to just PKR 6.303bln, indicating a clear pivot towards the domestic market. In 9MFY26, the Company recorded net revenues of PKR 29.1bln, reflecting a decline of approximately 1% compared to PKR 32.4bln in 9MFY25. This contraction indicates that the downward revenue trend has persisted into the current fiscal year.

During FY25, the Company’s profitability profile weakened at the operational level, with the gross profit margin declining to 5.6% from 7.3% in FY24, primarily due to lower revenues. The operating margin further compressed to 2.69% in comparison to 4.92% in FY24, reflecting not only the impact of top-line contraction but also a rise in operating expenses, which increased to PKR 1.1bln from PKR1bln despite reduced scale of operations. The net profit margin improved to 2.7% (net income of PKR 1.1bln) versus a negative 1.2% (net loss of PKR 554bln) in FY24. This apparent recovery in profitability is largely attributable to significant non-operating income from short term investments, rather than a fundamental improvement in core operating performance.  In 9MFY26, core profitability remains constant, with gross margin at 6.2% (9MFY25: 6.1%) and operating margin at 3.1% (9MFY25: 3.4%) amid higher overhead costs. However, the net margin declined to -0.5% (9MFY25: 1.2%), resulting in a net loss of PKR 134mln (9MFY25: profit of PKR 400mln), primarily attributable to revaluation losses on short-term investments.

The Company has recently installed 30,000 new spindles to enhance operational capacity, while further expanding its captive solar power generation capacity to improve energy efficiency and optimize power costs. These initiatives are expected to support margins and profitability going forward.

During FY25, working capital efficiency improved with inventory days declining to ~103 (FY24: 119) and net working capital days easing to 155, while receivables remained stable and minimal payables kept the cash cycle under pressure, alongside a rise in short-term borrowings to PKR 19.4bln (FY24: PKR 9.3bln). In 9MFY26, inventory days decreased to 109 (9MFY25: 111). Receivables days increased to 57 (9MFY25: 55), though net working capital days still rose to 160 (9MFY25: 154 days ), reflecting a structurally long cash conversion cycle high working capital intensity, with short-term borrowings at PKR 14.2bln.

The Company’s coverage ratios remained under pressure due to subdued profitability, with EBITDA declining to PKR 2,085mln in FY25 from PKR 3,302mln in FY24, leading to a weaker EBITDA-to-finance cost coverage of 0.6x (FY24: 0.8x). In 9MFY26, the coverage ratio declined to 0.3x (9MFY25: 0.4x). Despite a reduction in finance costs reflecting some easing in the interest burden the ratio continues to indicate constrained debt servicing capacity.

As of FY25, the Company’s debt-to-equity ratio stood at 52.1% (FY24: 45.7%), reflecting a relatively moderate leverage position. Total borrowings increased to PKR 25.7bln (FY24: PKR 17.5bln), primarily due to higher short-term borrowings (STBs), which rose to PKR 19.4bln (FY24: PKR 9.3bln) to support working capital requirements. Meanwhile, the Company’s equity base strengthened to PKR 23.6bln (FY24: PKR 20.9bln), supported by higher profit retention. As of 9MFY26, the Company’s equity stood at PKR 23.5bln with debt-to-equity ratio of 47.4%, indicating relatively stable leverage levels. Going forward, sustaining a balanced capital structure will remain essential to maintaining financial stability and supporting growth.