International Knitwear Limited (PSX: INKL) was incorporated in Pakistan as a public limited company in 1990. The principal activity of the company is manufacturing knitted and woven apparel products besides exporting garments.
Pattern of Shareholding
As of June 30, 2025, INKL has a total of 9.675 million shares outstanding which are held by 1393 shareholders.
Local general public has the majority stake of 53.88 percent in the company followed by directors, CEO, their spouse and minor children holding around 35.51 percent shares.
The remaining shares are held by other categories of shareholders.
Financial Performance (2019-25)
Except for a year-on-year plunge in 2021 and 2023, INKL’s topline rode an upward trajectory over the period under consideration. Conversely, its bottomline shrank until 2021 where the company recorded net loss.
INKL’s bottomline recovered from net loss in 2022 and remained constant in 2023. This was followed by a drastic fall in the company’s bottomline in 2024. This was despite tremendous topline growth registered in 2024.
In 2025, INKL’s topline and bottomline attained an unprecedented level.
The company’s margins considerably eroded in 2019. In 2020, gross and operating margins rebounded while net margin continued to slide. All the margins depicted a fall in 2021 followed by recovery in the subsequent two years. In 2024 and 2025, INKL’s margins eroded except for an uptick in net margin in 2025 (see the graph of profitability ratios).
The detailed performance review of the period under consideration is given below.
In 2019, INKL’s topline grew by 14.72 percent year-on-year to clock in at Rs. 451.10 million. This was on the back of increase of volume, prices and depreciation of Pak Rupee. The company achieved capacity utilization of 75.54 percent in 2019 as both local and export orders increased.
Cost of sales grew on the back of inflation, hike in commodity prices, elevated fuel and energy prices as well as Pak Rupee depreciation. This resulted in 45.41 percent decline in gross profit with GP margin falling 14.96 percent in 2018 to 7.12 percent in 2019. Operating expense surged by 28 percent year-on-year in 2019 on account of higher payroll expense, conveyance charges as well as depreciation.
The company hired additional resources which took its workforce from 127 employees in 2018 to 191 employees in 2019. INKL recorded other income of Rs.11.13 million in 2019 due to exchange gain, gain on translation of foreign currency debtors as well as hefty dividend income earned during the year. Other expense slid by 14.94 percent in 2019 due to lower profit related provisioning made during the year.
Operating profit plummeted by 15.63 percent in 2019 with OP margin slipping from 6 percent in 2018 to 4.42 percent in 2019. INKL was able to cut down its finance cost by 17.54 percent in 2019 despite higher discount rate. Net profit declined by 23.63 percent year-on-year in 2019 to clock in at Rs.10.24 million with EPS of Rs.1.06 versus EPS of Rs.1.39 recorded in the previous year. NP margin slumped from 3.41 percent in 2018 to 2.27 percent in 2019.
In 2020, INKL registered 19.14 percent year-on-year rise in its net sales which stood at Rs.537.46 million. This was due to robust performance in the first three quarters of 2020 before the outbreak of COVID-19. However, lockdown imposed during the 4th quarter of the year resulted in idle capacities, supply chain impediments and cancellation of orders across the industry.
As a result, INKL achieved capacity utilization of 70.05 percent in 2020. Due to improved volume and prices during the most part of the year, as well as cost control measures put in place by the management, INKL registered 59.74 percent year-on-year rise in its gross profit with GP margin picking up to 9.54 percent in 2020.
Operating expense fell by 1.46 percent in 2020 as workforce was streamlined to 152 employees which resulted in lower payroll expense. Due to restriction on travelling, conveyance charges also dropped during the year. Other income declined by 80.41 percent in 2020 due to no exchange gain and gain on translation of foreign currency debtors recorded during the year.
Dividend income also ticked down in 2020. Conversely, other expense mounted by 14.36 percent in 2020 due to higher profit related provisioning made during the year.
The company was able to strengthen its operating profit by 51.29 percent over last year with OP margin scaling up to 5.61 percent in 2020. Finance cost magnified by 156.24 percent in 2020 due to higher discount rate for most part of the year, elevated exchange loss as well as increased borrowings. This coupled with higher effective tax rate due to prior year taxation drove INKL’s net profit down by 24.45 percent in 2020 to clock in at Rs.7.73 million with EPS of Rs.0.8 and NP margin of 1.4 percent.
INKL recorded 9.2 percent year-on-year plunge in its net sales which clocked in at Rs.488.09 million in 2021. Slowdown of global economy due to COVID-19 as well as imposition of lockdowns time and again during the year dented its sales volume. The company’s capacity utilization fell to 57.75 percent in 2021.
Hike in global cotton and yarn prices as well as revision of gas tariff and non-availability of gas during winter months drove up INKL’s cost of sales. This resulted in 21.30 percent year-on-year fall in gross profit with GP margin sinking to 8.27 percent. Operating expense inched up by 3.44 percent in 2021 due to slightly increased salaries although workforce size remained almost intact during the year.
Other income surged by 181.24 percent in 2021 on account of higher dividend income, grant income and gain on sale of investments. INKL also recorded exchange gain of Rs.0.488 million during the year. Other expense tumbled by 68.76 percent in 2021 due to lower profit related provisioning done in 2021.
Operating profit contracted by 19.53 percent in 2021 with OP margin dropping to 4.97 percent. Finance cost enlarged by 32.72 percent in 2021 despite monetary easing due to higher mark-up on MTF salaries & wages (COVID-19) and other mark-up incurred during the year. INKL recorded net loss of Rs.0.05 million in 2021 with loss per share of Rs.0.01.
INKL posted a staggering 37.32 percent year-on-year escalation in its net sales which clocked in at Rs.670.26 million in 2022. This was on the back of revival in both local and export order coupled with improved prices and Pak Rupee depreciation which made export sales more worthwhile.
Due to increased demand, the company was able to employ its capacity efficiently with capacity utilization clocking in at 70.43 percent in 2022. Gross profit spiraled by 48 percent in 2022 due to better absorption of fixed overheads, upward price revision, elevated volumes and currency depreciation. 11.18 percent increase in operating expense in 2022 was primarily the effect of higher payroll expense as the number of employees increased to 181 in 2022.
Other income multiplied by 56.83 percent in 2022 due to higher exchange gain, dividend income, gain on disposal of property, plant and equipment as well as reversal of provision on ECL.
Higher profit related provisioning drove up other expense by 423.47 percent in 2022. Operating profit strengthened by 73 percent year-on-year in 2022 with OP margin climbing up to 6.27 percent. Finance cost dropped by 18.38 percent in 2022 due to lower other markup and mark-up incurred on export refinance facilities. INKL was able to pull its bottomline out of net loss and recorded net profit of Rs.22.08 million in 2022. This translated into EPS of Rs.2.28 and NP margin of 3.29 percent.
The political and economic instability prevailing in the country, high cost of doing business coupled with global recession took its toll on the net sales of the company which dwindled by 8.77 percent to clock in at Rs.611.49 million in 2023.
INKL’s capacity utilization drastically dropped to 46.53 percent in 2023 in line with reduced demand. Nevertheless, gross profit spiraled by 35 percent year-on-year in 2023 with GP margin flying up to 13.2 percent. This was due to higher margins on exports, cost control measures and the company’s ability to pass on the impact of high cost to its consumers.
High cost was the result of sky-rocketed inflation, shift to expensive imported cotton due to damage of local cotton produce owing to devastating floods, Pak Rupee depreciation as well as upward revision in gas and power tariff. 36 percent high operating expense incurred in 2023 was the consequence of higher payroll expense although the number of employees was streamlined to 121 in 2023.
Higher fee and subscription charges, depreciation as well as motor vehicle & conveyance charges also played their role in inflating the operating expense in 2023. Other income thinned down by 27.9 percent in 2023 mainly on account of exchange loss and loss and loss on disposal of investment. Higher provisioning for WWF and WPPF drove other expense up by 34.49 percent in 2023.
INKL was able to record 18.96 percent enhancement in its operating profit with OP margin reaching its optimum level of 8.19 percent in 2023. Finance charges continued to slide during the year due to significantly lower outstanding loans in 2023. Higher taxation due to the effect of prior year pushed down net profit by 0.06 percent in 2023 to clock in at Rs.22.072 million in 2023.
However, EPS remained intact at Rs.2.28 in 2023. NP margin boasted its highest level of 3.61 percent in 2023.
In 2024, INKL’s topline dipped by 39 percent to clock in at Rs.850.51 million. This came on the back of well-timed execution of BMR initiatives and the company’s ability to grab export opportunities besides focusing on local niche markets. The company achieved capacity utilization of 57.68 percent in 2024 and produced 749,825 pieces.
High cost of raw materials as well as elevated energy tariff resulted in 44.90 percent hike in cost of sales in 2024. This resulted in 0.86 percent uptick in gross profit with GP margin falling down to 9.57 percent in 2024. Operating expense ticked up by 2.72 percent in 2024 mainly on account of higher payroll expense due to inflationary pressure and increase in the number of employees. INKL’s factory workforce stood at 168 employees in 2024.
Other income slid by 28.69 percent in 2024 due to lower gain recorded on the disposal of property, plant & equipment. Other expense also dropped by 27.79 percent in 2024 due to lower profit related provisioning done during the year. Operating profit ticked up by 10.37 percent in 2024, however, OP margin plunged to 6.48 percent.
Finance charges escalated by 121 percent in 2024 due to higher discount rate and increased utilization of short-term working capital lines. INKL’s bottomline eroded by 49.97 percent to clock in at Rs.11.043 million with EPS of Rs.1.14 and NP margin of 1.30 percent.
In 2025, INKL’s topline jumped up by 42.34 percent to clock in at Rs.1210.57 million. This came on the back of increased volume in both local and export markets. Local sales which constituted 42.53 percent of the overall sales mix of INKL in 2024, mounted by 80 percent to clock in at Rs.654.110 million.
Local sales represented 53.88 percent of the sales mix of INKL in 2025. Export sales also mounted by 14.05 percent to clock in at Rs.554.22 million in 2025. In anticipation of higher demand, the company also enhanced its capacity in the value added segment. 43.57 percent escalation in cost of sales during 2025 was the result of elevated energy tariff and higher prices of raw materials.
While gross profit picked up by 30.66 percent in 2025, GP margin diminished to 8.79 percent. One of the company’s export client demanded delivery via air which resulted in a spike in freight charges during the year.
Overall operating expense recorded 9.17 percent rise in 2025. Other income mounted by 130.65 percent in 2025. This mainly comprised of gain on disposal of investments in mutual funds. The company also recorded exchange gain in 2025 versus exchange loss in the previous year.
The major component of INKL’s other income was dividend income coming from its investments in blue-chip stocks. Other expense surged by 83.66 percent in 2025 due to lower profit related provisioning done during the year. However, other expense was completely offset by other income, resulting in net other income of Rs.7.76 million, up 162.18 percent year-on-year.
INKL recorded 42.78 percent stronger operating profit in 2025 with OP margin staying intact at 6.50 percent. Finance cost inched up by 3.79 percent in 2025 despite lower discount rate. This was due to massive spike in short-term liabilities during the year.
INKL’s net profit registered a whopping 179.45 percent improvement to clock in at Rs.30.859 million in 2025. This translated into EPS of Rs.3.19 and NP margin of 2.55 percent in 2025.
Recent Performance (9MFY26)
During the nine-month period of the ongoing fiscal year, INKL registered 22.61 percent year-on-year decline in its net sales which clocked in at Rs.693.296 million. Local sales continued to thrive during the period, attaining 78.22 percent share of the overall sales mix of INKL in 9MFY26 versus its share of 56.60 percent in 9MFY25.
Conversely, export sales drastically fell by 61.73 percent to clock in at Rs.145.94 million in 9MFY26. This was due to elevated pricing pressure, tariff constraints as well as challenging geopolitical and macroeconomic conditions in the major export markets of INKL.
Respite in cost of sales coming on the back of stable prices of raw materials resulted in 4 percent uptick in the company’s gross profit in 9MFY26 with GP margin clocking in at 11.50 percent versus GP margin of 8.55 percent recorded in 9MFY25. Operating expense surged by 13.47 percent in 9MFY26 due to enhancement of the company’s operations and inflationary pressure.
Other income deteriorated by 34.31 percent in 9MFY26 due to thinner dividend income and a downtick recorded in gain on disposal of investments. Other expense also fell by 36.87 percent in 9MFY26 due to lower provisioning done for WWF and WPPF.
INKL recorded 9.25 percent diminution in its operating profit in 9MFy26 with OP margin clocking in at 7.67 percent versus OP margin of 6.54 percent recorded in 9MFY25.
Finance cost escalated by 33.74 percent in 9MFY26 due to increased utilization of working capital lines as the company offered extended credit terms to its customers to boost rapport and attract demand. This resulted in net profit of Rs.13.085 million in 9MFY26, down 45.71 percent year-on-year. EPS stood at Rs.1.35 in 9MFY26 versus Rs.2.49 in 9MFY25.
NP margin also shrank from 2.69 percent in 9MFY25 to 1.89 percent in 9MFY26.
Future Outlook
While INKL has been able to sustain its sales volume by grabbing the upcoming opportunities in both local and export, focusing on niche markets and enhancing its capacity by deploying timely BMR initiatives, it is unable to improve its margins and profitability owing to high cost of sales.
The main culprit which erodes INKL’s profitability is high energy tariff. The company has recently launched a 100 KW solar power project with another 150 KW solar power project in the pipeline. This will lessen INKL’s reliance on the national grid and keep a check on its cost of sales which will ultimately allow it to perform better in the face of challenging pricing pressure in the export market.
The company should also seek diversity on both supply and demand front to ensure seamless and undisrupted supply and sustained demand.
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