Siddiqsons Limited (“the Company” or “SSL”) was incorporated in Pakistan on September 17, 1989 under the repealed Companies Ordinance, 1984 (now Companies Act, 2017) as a public unlisted company limited by shares. The principal activity of the Company is the manufacture and sale of textile products. The Company also ventures into the development of real estate projects.

SSL is the flagship Company of the Siddiqsons Group and is considered a pioneer of the denim industry in Pakistan, with over 67 years of service and innovation since the Group’s establishment in 1958. The Company is renowned for its vertically integrated denim manufacturing and its commitment to sustainable, high-quality textile production.

The Company operates as a vertically integrated textile manufacturer, with in-house processes encompassing the entire textile value chain – including Spinning, Denim Fabric, Knitwear, Home Textiles, and Garments – across 10 manufacturing units. As per the latest audited accounts (FY25), the Company operated 26,016 spindles and 120 looms, with an installed denim fabric capacity of ~37.5 million meters and garment manufacturing capacity of ~6.5 million pieces per year. The Group’s aggregate capacity stands at 40+ million yards of denim fabric, 20.65+ million kg of yarn, 13.2 million garments, and 2.4+ million kg of knits annually. The Company’s energy requirement is primarily met through K-Electric and its own renewable (solar) capacity, with ~45% of Group energy needs met through renewable sources. The registered office is located at the 27th Floor, Ocean Tower, Main Khayaban-e-Iqbal Road, Block 9, Clifton, Karachi, with manufacturing facilities at S.I.T.E. and Korangi (Karachi) and Hub (Balochistan).

SSL is a family-owned enterprise, with majority ownership held by the Tariq family. Mr. Tariq Rafi holds a controlling interest with 62% of the shares, followed by Mrs. Nighat Tariq, who owns 15%, and Mr. Abdur Rahim Tariq, who holds 12%. The remaining shares are held by close family associates.

The operations are governed by the second generation of the family. Mr. Abdur Rahim Tariq, son of Mr. Tariq Rafi, is the COO of the Company. The establishment of a formal family constitution would further augment the ownership profile of the Company.

The directors and management of the Company bring substantial expertise and extensive experience in the textile industry, having successfully managed the Company for over three decades. Under their leadership, the Company remains committed to its core philosophy of achieving sustainable growth while maintaining operational excellence and industry best practices.

SSL is the flagship Company of the Siddiqsons Group. The Group has invested in several other businesses spanning banking (significant shareholding in MCB Bank since 1991), energy, real estate (Ocean Tower, Ocean Marina Gwadar, Ocean 99), and metals (Tin Plate). The sponsors have the capacity and provide timely financial support to the Company when needed.

The overall control of the board vests with the four-member board of directors. There are no independent or non-executive directors on the board, reflecting room for improvement. Mr. Tariq Rafi is the Chairman and CEO, while Mr. Abdur Rahim is the COO of the Company.

Mr. Muhammad Tariq Rafi is the Chairman of Siddiqsons Group and a sponsor director and Board of Directors member of MCB Bank Limited. He was awarded the coveted civil award of Sitara-e-Imtiaz by the President of Pakistan in 2006 for his services to industry and trade.

No formal board committees are formed; instead, members convene informally and frequently to discuss business development and the Company’s performance. The establishment of sub-committees would augment the board’s effectiveness.

MUNIFF ZIAUDDIN & CO. Chartered Accountants are the Company’s auditors. The auditor issued a qualified opinion on the financial statements for FY25 due to limitation of scope on certain matters, which reflects negatively on the financial transparency of the Company. The principal bases for the qualified opinion are: (i) non-recognition of the Gas Infrastructure Development Cess (GIDC) liability of PKR 533.28 million pertaining to 2016–2020; (ii) non-recognition of the Company’s 62% share (PKR 615.63 million) of the Performance Guarantee encashed in relation to associate Siddiqsons Energy Limited; (iii) unavailability of financial statements/confirmations for certain associated and related parties to whom loans have been advanced, and non-determination of markup thereon; and (iv) non-preparation of consolidated financial statements in respect of its subsidiary, which management considers insignificant.

The Company has a well-defined organizational structure with clear segregation of responsibilities. The corporate office has three departments, namely: i) Finance, ii) Admin & HR, and iii) Imports & Exports. The manufacturing segment has six departments, namely: i) Marketing & Merchandising, ii) Operations, iii) Quality Control, iv) Finance, v) HR, and vi) Compliance. Each department is headed by a GM who reports directly to the COO, with the exception of the Finance GM, who reports directly to the CEO.

Mr. Abdur Rahim (COO) has been associated with the Company since 2007. He has vast experience in the denim fabric and garments industry and has extensively travelled to different regions of the world for the sales and marketing of the Siddiqsons Group. All functional departments are headed by seasoned business professionals.

The management teams of all operating units report directly to the Director Technical, who in turn reports to the Chief Operating Officer (COO). No management committees are currently present; their establishment would enhance the Company’s management effectiveness.

The Company’s operational framework is supported by a robust IT infrastructure, anchored by SAP – one of the leading Enterprise Resource Planning (ERP) systems globally. The implementation was carried out by ABACUS Consulting. The ERP system is fully integrated across all key departments, facilitating comprehensive financial and operational control.

The Company implements customized controls at various levels within SAP. In addition, rigorous quality checks are conducted at the manufacturing units, and the denim unit has a dedicated Quality Control lab ensuring quality at all stages of production. The Company is accredited with several international certifications – including LEED Platinum (USGBC), ZDHC, WRAP, OEKO-TEX, GOTS, Better Cotton Initiative (BCI), Global Recycled Standard, SMETA/Sedex, amfori, Higg Index, ISO 9001/14001/45001, and Cotton USA – reflecting well on the control environment and sustainability credentials.

The textile sector remains a key contributor to Pakistan’s exports, supported by demand for value-added products such as garments, knitwear, and home textiles. Export performance has shown gradual improvement amid recovering demand from key international markets and Pakistan’s relatively favorable tariff positioning compared to certain regional peers. However, the sector continues to face challenges arising from elevated energy costs, reliance on imported cotton due to lower domestic crop availability, and ongoing cost pressures. The recent easing in interest rates and gradual recovery in export demand are expected to support sector performance, while sustained investment in value addition, operational efficiency, and market diversification remains important for long-term competitiveness.

The Company has a spinning capacity of ~23.2 million kilograms per year, ~37.5 million meters of denim fabric, and ~6.4 million pieces of garments per year. It is one of the largest and most advanced garment manufacturers in Pakistan, operating fully LEED-certified facilities. Considering this, the Company’s relative position is considered moderate.

During 6MFY26, the Company reported net sales of ~PKR12,413 million (FY25: ~PKR27,825 million; FY24: ~PKR29,178 million). Export sales remained the dominant contributor to revenues, accounting for ~62.2% of total sales during 6MFY26. The decline in FY25 revenues was primarily attributable to subdued volumetric offtake amid challenging global demand conditions. The Company maintains a diversified export footprint, with key markets including Bangladesh, Turkey, and Europe.

The Company’s gross margins remained broadly stable during the review period, reflecting its vertically integrated operations and diversified product portfolio. Gross margin stood at ~15.2% in 6MFY26, compared to ~15.1% in FY25 and ~15.4% in FY24. However, operating profitability remained under pressure during FY25 due to elevated operating expenses and subdued export realizations amid challenging demand conditions. With the easing of financing costs and gradual improvement in market conditions, profitability indicators showed relative stability during 6MFY26. Going forward, the Company’s ability to enhance capacity utilization, improve product mix, and maintain cost efficiencies will remain important for sustaining margins.

The Company has maintained an investment portfolio in real estate and blue-chip companies on the stock exchange to generate steady investment income – mainly dividends and rental income – to augment its liquidity profile and supplement its bottom line. Over the years, Siddiqsons has executed CAPEX for BMR to improve manufacturing efficiency, increasing operating fixed assets to ~PKR12.1 billion. The Company continues to invest in sustainability initiatives, including 8.6 MW of solar capacity, daily water-recycling capacity, and a new LEED Platinum green garment plant, alongside community programs (Garment Stitching Center, Girls IT Center, and the Aziz Rafi Trust) under its broader ESG agenda. 

At end-Jun25, the net working capital cycle increased to ~137 days (end-Jun24: ~128 days) on account of higher inventory days at ~123 days (end-Jun24: ~107 days). Trade assets increased to ~PKR16,190 million (end-Jun24: ~PKR13,989 million), driven by higher inventory at ~PKR9,289 million (end-Jun24: ~PKR9,529 million) and trade receivables at ~PKR3,235 million (end-Jun24: ~PKR2,944 million). Consequently, the room-to-borrow declined to ~PKR2,730 million (end-Jun24: ~PKR2,844 million). During 6MFY26, the net working capital cycle further increased to ~144 days (FY25: ~137 days) owing to higher inventory days at ~127 days (FY25: ~123 days). Trade assets stood at ~PKR15,525 million (FY25: ~PKR16,190 million) due to lower inventory at ~PKR7,983 million (FY25: ~PKR9,289 million) and trade receivables at ~PKR2,944 million (FY25: ~PKR3,235 million). Accordingly, the room-to-borrow marginally declined to ~PKR2,357 million (FY25: ~PKR2,730 million).

During FY25, the Company’s FCFO declined to ~PKR1,584 million (FY24: ~PKR2,849 million) on the back of weakened operating cash generation. Finance cost decreased to ~PKR1,819 million (FY24: ~PKR2,327 million) owing to relatively lower borrowing costs. Resultantly, interest coverage remained stable at ~1.6x (FY24: ~1.6x), while debt coverage declined to ~1.0x (FY24: ~1.4x). During 6MFY26, the Company’s FCFO improved to ~PKR1,723 million (FY25: ~PKR1,584 million), while finance cost for the period stood at ~PKR552 million (FY25: ~PKR1,819 million). Consequently, interest coverage strengthened to ~3.6x (FY25: ~1.6x), and debt coverage also improved to ~3.6x (FY25: ~1.0x).

At end-Jun25, the leveraging of the Company increased to ~43.7% (end-Jun24: ~38.8%) owing to higher borrowings, which increased to ~PKR13,460 million (end-Jun24: ~PKR11,999 million), while equity marginally improved to ~PKR19,980 million (end-Jun24: ~PKR19,225 million). At end-Dec25 (6MFY26), leveraging declined to ~39.7% (end-Jun25: ~43.7%) due to lower borrowings at ~PKR11,547 million (end-Jun25: ~PKR13,460 million), while equity remained broadly stable at ~PKR20,043 million (end-Jun25: ~PKR19,980 million).