Chenab Limited (PSX: CHBL) was incorporated in Pakistan as a private limited company in 1985 and was subsequently converted into a public limited company. Its ordinary shares and preference shares were listed on the Pakistan Stock Exchange in 2004 and 2005 respectively. The company is engaged in the export of value-added fabrics, textile made-ups, casual and fashion garments. It is also engaged in the toll manufacturing of fabric in the local market.
Pattern of Shareholding
As of June 30, 2025, CHBL has a total of 115 million ordinary shares and 80 million preference shares outstanding which are held by 1754 shareholders and 1443 shareholders respectively. Directors, CEO, their spouse and minor children have the majority stake of 52.31 percent in the outstanding ordinary shares of CHBL followed by individuals holding 47.26 percent shares. The remaining shares are held by other categories of shareholders. In case of preference shares, 54.20 percent stake is held by financial institutions, 43.26 percent by individuals and 2.41 percent by joint stock companies. The remaining shares are held by other categories of shareholders.
Financial Performance (2020-2025)
CHBL didn’t record any sales in 2020 and 2021, however, posted a staggering topline growth in the subsequent three years followed by a decline in 2025. The company failed to register net profit in any of the years under consideration except in 2021 where it didn’t post any sales – thanks to robust other income. CHBL’s margins stayed in the negative zone over the period under consideration except in 2023 and 2024 where it posted positive gross profit margin (see the graph of profitability ratios). The detailed performance review of the period under consideration is given below.
In 2020 and 2021, the company was under liquidation and its affairs were run by Joint Official Liquidators appointed by the court. Hence, CHBL didn’t carry out its sales and purchases. The only source of revenue during the period was rental income of its business assets. In 2021, other income rose by 1607 percent owing to balances written back during the year. This enabled the company to post net profit of Rs.999.743 million and EPS of Rs.8.49 in 2021 versus net loss of Rs.96.58 million and loss per share of Rs.0.84 registered in 2020.
In 2022, the company received reversal of winding up order and constituted its board. During the year, the loans of the company were restructured through “Scheme of arrangement” (SOA) approved by the High Court, Lahore.
The company initiated trial run BMR followed by the commencement of commercial operations. It registered net sales of Rs.503.74 million in 2022. CHBL’s net sales largely comprised of proceeds from exports of garments, made-ups and fabrics. The plant was non-operational for quite some time coupled with under utilization of capacity in 2022 resulted in high cost of sales.
This resulted in gross loss of Rs.220.93 million in 2022. Administrative expense also mounted by 29 percent in 2022 due to a momentous spike in payroll expense, legal & professional charges as well as directors’ remuneration. The company hired new employees to develop its workforce which stood at 843 employees as of June 30, 2022 versus 38 employees in the previous year.
Distribution expense of Rs.7.33 million incurred by CHBL in 2022 mainly comprised of carriage & freight charges as well as export clearing & forwarding charges. Loss incurred on the disposal of investment property and operating assets culminated into other expense of Rs.34,96 million in 2022. Other income dropped by 83,93 percent in 2022 due to high-base effect as the company wrote off credit balances in the previous year.
The shrinkage of other income resulted in operating loss of Rs.262.59 million in 2022 versus operating profit of Rs.1019.84 million registered in 2021. Finance cost surged from Rs.0.03 million in 2021 to Rs.180.72 million in 2022 due to mark-up charges incurred on Tier-1 debt as Tier-2 debt was to be repaid after Tier-1 debt as per the scheme of arrangement.
To put into context, according to the SOA approved by the High Court, the total outstanding debt of the company was divided into two equal portions of Rs.4737.486 million each, termed as Tier-1 and Tier-2 debt. While Tier-1 debt was to be repaid in seven and half years starting from FY22, Tier-2 debt was to be repaid in six and half years after the payment of Tier-1 debt.
The lenders waived off the past mark-up and initial Tier-2 debt mark-up on the condition that the principal and the subsequent mark-up will be paid in a timely manner. CHBL incurred net loss of Rs.452.377 million in 2022 with loss per share of Rs.3.93.
In 2023, CHBL posted a tremendous 322.44 percent year-on-year growth in its topline which clocked in at Rs.2127.98 million. After the implementation of the SOA, the banks provided the company with the fresh working capital lines to carry on its operations. Sponsors also injected fresh capital of Rs.808.90 million as directors’ loan to help the company meet its financing needs.
During the year, export sales grew by a massive 8 times when compared to the previous year. Export sales contributed 57.5 percent to the overall sales mix of CHBL in 2023 versus its share of 26.88 percent in the previous year. Pak Rupee depreciation also provided impetus to export sales of company, providing it with a robust exchange gain. Cost of sales hiked by 189.764 percent in 2023, resulting in gross profit of Rs.28.14 million.
This was the first time CHBL posted gross profit during the period under consideration. GP margin clocked in at 1.32 percent in 2023. Administrative expense mounted by 34.93 percent in 2023 mainly on account of payroll expense and directors’ remuneration.
The company expanded its workforce to 877 employees in 2023. Distribution expense escalated by a massive 410.425 percent in 2023 mainly on the back of carriage & freight, export clearing & forwarding charges as well as export development surcharge incurred during the year.
Other expense slid by 50.92 percent in 2023 due to high-base effect as the company recorded loss on the disposal of operating assets and investment property in the previous year. Other expense of Rs.17.16 million recorded in 2023 was due to loss on disposal of non-current assets held for sale.
The company sold its non-core assets under the SOA and was liable to pay 75 percent of the sales proceeds to the agent bank which will then pay each lender on a pro-rata basis. The remaining 25 percent were injected as working capital for the company. Other income contracted by 36.92 percent in 2023 as CHBL didn’t write back any credit balances in 2023 unlike last year.
The company recorded operating loss of Rs.159.99 million in 2023, down 39 percent year-on-year. Finance cost surged by 23.71 percent in 2023 on account of mark-up due in accordance with the SOA as well as short-term borrowing of Rs.70 million acquired during the year for working capital requirements. CHBL recorded net loss of Rs.405.14 million in 2023 with loss per share of Rs.3.52. It is to be noted that as of June 30, 2023, principal payment amounting to Rs.457.34 million was overdue. This was in violation of the terms set under the SOA.
In 2024, CHBL’s net sales mounted by 57 percent to clock in at Rs.3342.30 million. Export sales continued to lead the topline growth with year-on-year growth of 67.13 percent. Export sales’ share in the sales mix of CHBL grew to 61.16 percent in 2024. Cost of sales mounted by 58.65 percent in 2024 on the back of high electricity tariff, inflationary pressure as well as Pak Rupee depreciation which resulted in net exchange loss for the company. Gross profit also shrank by 61.37 percent to clock in at Rs.10.869 million in 2024.
This translated into a thinner GP margin of 0.33 percent in 2024. Administrative expense multiplied by 39.58 percent in 2024 primarily due to higher payroll expense, utility expense as well as vehicle running expense incurred during the year. During the year, the company further expanded its workforce to 1109 employees. Distribution expense escalated by a massive 246.365 percent in 2024 due to drastic spike in carriage & freight charges as well as export clearing & forwarding charges incurred during the year.
Last year, the company sold off its non-current assets at a loss as per the SOA which resulted in other expense. However, in 2024, CHBL sold its non-current assets at a gain. This coupled with balances written back during the year resulted in 258.976 percent stronger other income in 2024. CHBL incurred operating loss of Rs.46.29 million in 2024, down 71 percent year-on-year. Finance cost inched up by 9 percent in 2024.
The company failed to fulfill its commitment and the principal of Rs.4.29 million was overdue as of June 30, 2024. The same infringement happened in the previous year too. Hence, the past mark-up which was waived off on the condition of timely payment, was also applied. CHBL incurred net loss of Rs.326.210 million in 2024, down 19.48 percent year-on-year. This culminated into loss per share of Rs.2.84.
After three years of posting topline growth, CHBL posted year-on-year decline of 28.51 percent in its topline which clocked in at Rs.2389.57 million in 2025. This came on the back of decline in both local and export sales in 2025. This was on the back of geopolitical tensions, appreciation of Pak Rupee against the greenback and shortage of funds to meet working capital requirements.
Spike in energy tariff, raw material cost and increase in advance turnover tax translated into gross loss of Rs.80.27 million in 2025 as against gross profit posted in the previous two years. Administrative expense tumbled by 7.63 percent in 2025 due to lower payroll expense as the company streamlined its workforce from 1109 employees in 2024 to 723 employees in 2025.
Directors’ remuneration, utility expense, office supplies expense as well as vehicle running & maintenance expense also posted a decline in 2025. Distribution expense also slid by 6.13 percent in 2025 due to considerably lower export clearing and forwarding charges incurred during the year. No other expense was incurred during the year.
Other income deteriorated by 65.18 percent in 2025 due to no gain recorded on the disposal of non-current assets held for sale, thinner rental income and lower gain on the disposal of operating assets. Operating loss mounted by 718.262 percent to clock in at Rs.378.80 million in 2025. Finance cost slid by 13.22 percent in 2025 due to lower outstanding debt. The company paid all the installments due until the end of 2025. Net loss surged by 90.95 percent to clock in at Rs.622.895 million in 2025 with loss per share of Rs.5.42.
Recent Performance (1QFY26)
During the first quarter of the ongoing fiscal year, CHBL posted 51.19 percent thinner topline to the tune of Rs.447.71 million. While local sales as well as processing & conversion income ticked up during 1QFY26, massive decline in export sales cascaded their effect.
Tariffs imposed by the US on China and India have made Pakistani textile exports more competitive, however, lack of sufficient financing lines didn’t allow the company to fully benefit from this opportunity. CHBL incurred gross loss of Rs.34.13 million in 1QFY26 versus gross profit of Rs.12.62 million recorded in 1QFY25. Lower sales volume resulted in 89.68 percent decline in distribution expense in 1QFY26.
Conversely, administrative expense surged by 12 percent in 1QFY26. High-base effect created by balances written back in 1QFY25 resulted in 87.10 percent deterioration in other income in 1QFY26. CHBL posted operating loss of Rs.108.90 million in 1QFY26, up 153.50 percent year-on-year.
Finance cost ticked down by 6.87 percent in 1QFY26 due to lower outstanding debt and monetary easing. No installments were overdue for the period. Net loss escalated by 52.21 percent to clock in at Rs.170.196 million in 1QFY26. This translated into loss per share of Rs.1.48 in 1QFY26 versus loss per share of Rs.0.97 recorded in 1QFY25.
Future Outlook
CHBL is all set to further expand its export sales, however, is constrained due to limited availability of funds. As of September 30, 2025, CHBL has an accumulated loss of Rs.8.77 million. Moreover, its current liabilities exceed its current assets by Rs.1522.326 million. The company is arranging working capital lines coupled with the injection of equity and subordinated loans by the sponsors to run its operations smoothly. With the onset of monetary easing, the company can acquire fresh loans on easier terms given the FIs agree to provide sufficient financial limits.
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