The Company was incorporated in 1983 as a public limited Company under the name "Alhamd Textile Mills Limited". It was listed on the Karachi Stock Exchange and Lahore Stock Exchange in 1988. Afterward, it was voluntarily delisted from the stock exchanges in 2004 and subsequently converted into a private limited Company in 2005.

The Company was once part of a group of companies led by Sheikh Imdad Ahmed (late). He was the driving force behind the establishment of the Company and served in the capacity of the Chairman. After the death of Sheikh Imdad Ahmed, the Company went through an amicable business settlement between his four sons. As a consequence of this settlement, 99.64% of the Company’s paid-up shares were transferred to Sheikh Afzaal Ahmed and his immediate family in 1998.

The principal activity of ACL is the manufacturing and sale of cotton/blended yarn. Its operational infrastructure includes two state-of-the-art spinning facilities with a cumulative annual production capacity of ~170,472 spindles (Unit I with 126,696 spindles & Unit II with 43,776 spindles). The Company's registered head office is located at 29-A, Block E1, Gulberg III, Lahore, while the manufacturing facility is situated at Dera Ghazi Khan, which is considered a major cotton cultivation area in Pakistan. The Company fulfills its energy requirements through connections with Gas and WAPDA. To optimize production costs, the management will invest in an 8-megawatt solar power project, which will be commissioned by the end of June 2025.

Alhamd Corporation (Pvt.) Limited is a family-owned business. Mr. Sheikh Afzaal Ahmed holds a 74% stake, while his son, Mr. Asad Imdad Sheikh, owns a 25% stake.

The Company's ownership is predominantly concentrated within the Sheikh family, with the majority of shares held by key family members. A small portion of the Company’s shares is distributed among a few other individuals, some of whom are also family members. This clear distribution of shareholding, with the Sheikh family maintaining control, indicates a well-defined and structured line of succession, ensuring continuity and stability in leadership for the Company’s future.

The Sheikh family has a rich history in the textile industry, spanning over three decades, which has equipped them with a wealth of technical expertise and industry insight. Sheikh Afzaal Ahmed, the key figure behind the Company's operations, possesses a deep understanding and sharp acumen in textile spinning, a core area of the business. His extensive experience in the field has played a critical role in ensuring the Company’s operations remain efficient and sustainable. This foundation not only drives the Company’s day-to-day activities but also positions it for long-term success in the competitive landscape.

The financial strength of the sponsor family is considered adequate. The Company being the only operational Company of the shareholders reflects the sponsor's willingness to support if needed.

The board comprises four members from the sponsoring family. Sheikh Afzaal Ahmed is serving as the CEO and Chairman of the board. The sponsor-dominated board along with its limited size indicates room for improvement within the governance framework of the Company.

Sheikh Afzaal Ahmed, a seasoned businessman, oversees and manages the all operational aspects of the Company. With over 42 years of experience in the industry, he brings invaluable expertise in strategic decision-making. His knowledge of the textile industry has been integral in shaping the Company's direction and maintaining its competitive edge. Mr. Asad Imdad Sheikh, the son of Sheikh Afzaal Ahmed, is a graduate of Duke University in Durham, North Carolina, USA, where he earned a degree in Marketing and Business Management, with a focus on Social Sciences. With a strong academic background, he has been an essential part of the Company for the past 10 years, contributing to a forward-thinking direction.

The Company does not have a board committee in place, which affects the overall effectiveness of the board. During FY24, four BOD meetings were conducted to discuss the Company's performance, and the attendance of the Board of Directors (BOD) remained strong. The meeting minutes have been formally documented. However, the establishment of a board committee will further enhance the effectiveness of the board.

M/s Shinewing Hameed Chaudhari and Co., Chartered Accountants are the external auditors of the Company. The Company’s auditors are rated in the "B Category" by the SBP panel of auditors. The auditors have expressed an unqualified opinion on the financial reports for the year ended June 2024.

The Company’s organizational structure is designed with distinct functional departments, each led by highly skilled professionals with extensive experience in the textile industry. These department heads bring a wealth of knowledge and expertise, ensuring that each function, whether it be production, marketing, finance, or operations runs efficiently and effectively.

Sheikh Afzaal Ahmad is the Chief Executive Officer (CEO) of ACL while his son, Mr. Asad Imdad Sheikh, is serving as the Chief Operating Officer (COO). The other two executive directors lead the technical and commercial department. Mr. Mudassar Zubair, the Chief Financial Officer (CFO) has been associated with the Company for over ten years. 

The management meetings are held quarterly to resolve or proactively address any operational issues of the Company.

To enhance reporting and streamline operations, the Company implemented a fully functional ERP (Enterprise Resource Planning) software in 2021. This system has significantly improved overall efficiency by integrating key business processes across departments, from inventory management to financial reporting. In the coming years, the management intends to install updated dashboards with real-time data access and automated workflows which is expected to facilitate better decision-making, reduce manual errors, and improve communication across the organization.

The Company has maintained a sound quality management system since its inception, with a strong focus on producing premium-quality yarn. To ensure the highest standards, the Company imports raw cotton from reputable sources such as USA and Brazil, among others. Additionally, the Company has an in-house internal audit department for control over its processes and quality standards.

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. In FY25, the transition from the final tax regime to the normal tax regime is set to impact the profitability matrix of export-oriented units, with a 29% tax on profits and a super tax of up to 10%.

Alhamd Corporation (Pvt.) Limited is a mid-sized spinning unit and one of textile ventures of the Sheikh family. The total spindles installed in Pakistan's spinning industry are 13.4 mln out of which the Company has 170,472 spindles installed i.e., 1.3%.

The Company's revenue base is predominantly vested with local sales. During FY24, the Company's top line experienced an upswing, reaching PKR 20.8bln (FY23: PKR 14.0bln), primarily due to a sizeable increase in local sales, which account for approximately 99.6% of the revenue (inclusive of indirect sales). The export sales make up around 0.40% clocking at PKR 75mln. The Company enjoys a stable customer base in the local market. Client concentration risk is considered low, attributed to the long-term association of the Company with established entities; Gul Ahmed Textile Mills Limited, J.K Spinning Mills Limited, Yunus Textile Mills Limited, etc. During 1QFY25, the topline posted a healthy growth of 23.3% on a quarter-on-quarter basis driven by an uptick in demand for coarse yarn reported at PKR 4.7bln (1QFY24: PKR 3.8bln).

During FY24, the gross profit margin inched up to 6.7% (FY23: 6.3%) primarily due to escalated energy costs depicting the industry norm. PBIT exhibited a notable improvement at PKR 822mln (FY23: PKR 441mln) driven by a massive incline in the operating expenses at PKR 776mln (FY23: PKR 595mln) concomitant with the inflationary trends. The extensive working capital requirements magnified the Company's funding cost recorded at PKR 1.5bln (FY23: PKR 477mln). The Company's bottom line booked a net loss of PKR 774mln (FY23: net loss of PKR 171mln), with a negative net profit margin of 3.7% (FY23: -1.2%). During 1QFY25, the Company’s gross profit margin and net profit margin stood at 8.4% and -4.1% respectively.

The Company’s new spinning unit (Unit II) is operational with an adequate capacity utilization level. Further, the management plans to install an 8 Mega Watt solar which is expected to become operational by the end of FY25.

The Company's working capital cycle is a function of inventory days and trade receivables days for which the Company majorly relies on short-term borrowings. During 1QFY25, the net working capital cycle was extended to 97 days (FY24: 71 days) attributed to a surge in the inventory cycle (1QFY25: 71 days; FY24: 55 days) and the trade receivable cycle (1QFY25: 39 days; FY24: 28 days), demonstrating the delay in recovery of payments from the customers. The Company holds a low borrowing capacity as evidenced by the short-term trade leverage of 16.6% (FY24: 20.5%).

During 1QFY25, the dilution in PBT ultimately impacted the Company's free cash flows from operations (FCFO) reported at PKR 277mln (FY24: PKR 1.4bln). The expensive borrowings coupled with a dip in free cash flows from operations (FCFO) led to a decrease in the Company's interest coverage (1QFY25: 0.7x, FY24: 0.9x). However, the improvement in the coverages of the Company remains imperative for the assigned ratings.

The Company's debt profile entirely comprises short-term borrowings, which include an Export Refinance Scheme (ERF) provided by the State Bank of Pakistan (SBP) as well as conventional borrowings. The Company has managed to maintain a leveraged capital structure mainly dominated by the STBs to meet the working capital requirements. During 1QFY25, the Company’s total leverage rose to 62.0%, compared to 56.7% as of FY24 with the total borrowing clocking at PKR 9.4bln (FY24: PKR 7.9bln). However, the Company's total equity was reported at PKR 6.1bln (FY24: PKR 6.3bln).