Wah Noble Chemicals Limited (PSX: WAHN) was incorporated in Pakistan as a public limited company in 1983. The company is engaged in the manufacturing and sale of Urea Formaldehyde Moulding Compound, Formaldehyde and Formaldehyde based liquid resins which are used as bonding agents in the chip board, plywood and flush door manufacturing industries.
Pattern of Shareholding
As of June 30, 2025, WAHN has a total of 9 million shares outstanding which are held by 1002 shareholders. Associated companies, undertakings and related parties account for 56.69 percent shares of WAHN followed by local general public holding 25.74 percent shares of the company. 9.99 percent of WAHN’s shares are held by insurance companies and 6.41 percent by NIT & ICP. The remaining shares are held by other categories of shareholders.
Performance Trajectory (2019-24)
Except for a year-on-year drop in 2020, WAHN’s topline followed an upward trajectory over the period under consideration. Conversely, its bottomline dipped in 2020, 2022 and 2025. WAHN’s margins plunged in 2019. In 2020, gross and operating margins recovered while NP margin continued to shrink. This was followed by a staggering rebound in all the margins in 2021. In 2022, margins slipped back only to jump back in the subsequent two years. After attaining their optimum level in 2024, WAHN’s margins receded in 2025. The detailed performance review of the period under consideration is given below.
In 2019, WAHN’s net sales grew by 34.62 percent year-on-year to clock in at Rs. 2,262.83 million. This was on account of improved demand across product categories. However, due to cut-throat competition in the market, the company couldn’t increase the prices proportionately. This coupled with increase in the prices of raw materials due to Pak Rupee depreciation resulted in a drop in GP margin from 18.87 percent in 2018 to 15.68 percent in 2019. In absolute terms, gross profit inched up by 11.89 percent in 2019. Administrative expense ticked down by 3.56 percent in 2019 due to lower payroll expense as the company squeezed its workforce.
Distribution expense multiplied by 28.52 percent in 2019 due to higher payroll expense, travelling & conveyance expense as well as vehicle running expense incurred during the year. Allowance for ECL plummeted by 18.48 percent in 2019 as the company recovered bad debt during the year which also boosted its other income. Interest on collateral placed against bank guarantee also drove other income up in 2019.
WAHN recorded 16.32 percent year-on-year rise in its operating profit in 2019, however, OP margin slumped from 15.26 in 2018 to 13.18 percent in 2019. Finance cost hiked by 597.58 percent in 2019 due to elevated discount rate and increased borrowings. This diluted the bottomline growth in 2019.
Net profit inched up by 1.37 percent in 2019 to clock in at Rs.176.493 million with EPS of Rs.19.61 versus EPS of Rs.19.34 posted in 2018. NP margin ticked down from 10.36 percent in 2018 to 7.8 percent in 2019.
In 2020, WAHN recorded 13.82 percent year-on-year slide in its net sales which clocked in at Rs.1950.05 million. This was on account of COVID-19 which halted the economic activity during the last quarter of the year. COVID-19 related lockdowns resulted in a decline in production and sales volume. Consequently, cost of sales also dropped by 14.88 percent in 2020. Gross profit slid by 8.14 percent during the year, however, GP margin jumped up to 16.72 percent.
Administrative expense dwindled by 17.71 percent in 2020 due to lower legal & professional charges, travelling & conveyance charges and no corporate service fee paid during the year.
Distribution expense slumped by 3.94 percent in 2020 due to curtailed salaries & wages, vehicle running and communication charges incurred during the year. Allowance for ECL escalated by 106.18 percent in 2020 due to delayed payments by the customers on account of sluggish business activity. WAHN was able to cut down its other expense by 27.29 percent in 2020 on account of reduced provisioning done for WWF and WPPF.
Other income grew by 17.86 percent in 2020 primarily on account of gain on sale of property, plant and equipment. Operating profit contracted by 12.79 percent in 2020, however, OP margin slightly inched up to clock in at 13.34 percent. Finance cost spiked by 58.53 percent in 2020 due to higher discount rate for most part of the year and increased utilization of short-term borrowing lines. Net profit shrank by 26.17 percent to clock in at Rs.130.307 million in 2020 with EPS of Rs.14.48 and NP margin of 6.68 percent.
WAHN registered a phenomenal 39.68 percent year-on-year growth in its net sales which clocked in at Rs.2,723.82 million in 2021. This was on account of demand recovery, price rationalization and better sales mix. Optimum capacity utilization resulted in lower fixed cost per unit.
This pushed gross profit up by 71.42 percent in 2021 with GP margin recorded at 20.52 percent. Administrative expense surged by 8.99 percent in 2021 due to higher payroll expense as WAHN expanded its workforce from 148 employees in 2020 to 174 employees in 2021. Distribution expense escalated by 13.58 percent in 2021 primarily due to higher salaries & wages as well as vehicle running expense incurred during the year.
The company booked 87.28 percent lower allowance for ECL in 2021 due to loan recovery as business activity resumed post COVID-19. Other expense hiked by 161.45 percent in 2021 due to increased profit related provisioning. Other income also picked up by 48.38 percent in 2021 due to bad bet recovery, sale of scrap and interest on collateral placed against bank guarantee. The company recorded a stunning 92.93 percent rebound in its operating profit in 2021 with OP margin climbing up to 18.43 percent.
Finance cost dropped by 59.81 percent in 2021 due to monetary easing, improved liquidity position and lower running finance obtained during the year. Net profit strengthened by 156.63 percent to clock in at Rs.334.41 million with EPS of Rs.37.16 and NP margin of 12.28 percent.
In 2022, WAHN’s topline picked up by 21.51 percent to clock in at Rs.3,309.61 million. This was on account of higher sales volume. However, spike in raw material and conversion cost due to high inflation and Pak Rupee depreciation resulted in 18.10 percent lower gross profit in 2022 with GP margin drastically falling down to 13.83 percent. 23.34 percent escalation in administrative expense due to higher payroll expense as number of employees grew to 181 in 2022. Elevated corporate service fee and legal & professional charges also drove up administrative expense in 2022.
Distribution expense surged by 26.89 percent in 2022 due to higher salaries & wages as well as travelling & conveyance charges incurred during the year. WAHN booked 580.62 percent higher allowance for ECL in 2022 due to higher sales volume which in-turn led to higher outstanding receivables due to delayed payments. Other expense slid by 32.75 percent in 2022 due to lower profit related provisioning booked during the year.
Other income enhanced by 28.35 percent in 2022 due to bad debt recovery and scrap sales. Operating profit nosedived by 23.79 percent in 2022 with OP margin falling down to 11.56 percent. Finance cost mounted by 123.73 percent in 2022 due to monetary tightening and excessive working capital related borrowings. Net profit dipped by 37.46 percent to clock in at Rs.209.12 million with EPS of 23.24 and NP margin of 6.32 percent.
In 2023, WAHN’s net sales progressed by 32.45 percent to clock in at Rs.4,383.44 million. This was on account of increased sales volumes, better sales mix and upward price revision. This coupled with rigorous cost control measures put in place by the company resulted in 93.15 percent higher gross profit in 2023 with GP margin jumping up to 20.17 percent. Administrative expense surged by 21.91 percent in 2023 due to higher payroll expense on account of inflationary pressure. Distribution expense multiplied by 39.45 percent due to higher salaries & wages and vehicle running expense incurred during the year.
Allowance for ECL escalated by 46.4 percent in 2023 due to interruption in payments. Other expense hiked by 110.45 percent in 2023 due to higher provisioning for WWF and WPPF done during the year. Other income grew by 29.79 percent in 2023 mainly on account of higher interest income earned from saving accounts.
WAHN recorded 99.13 percent higher operating profit in 2023 with OP margin riding up to 17.38 percent. Finance cost soared by 33.8 percent in 2023 due to elevated discount rate although outstanding borrowings significantly shrank in 2023. Net profit improved by 114.82 percent to clock in at Rs.449.23 million with EPS of Rs.49.91 and NP margin of 10.25 percent.
In 2024, WAHN’s net sales posted 6.87 percent year-on-year rise to clock in at Rs.4,684.72 million. This was on the back of increased volume, price escalation and better sales mix. The company kept a check on its cost through operational efficiency. Cost of sales inched up by 3.72 percent during 2024.
This culminated into 19.37 percent year-on-year improvement in gross profit with GP margin attaining its highest level of 22.52 percent in 2024. Administrative and distribution expenses spiked by 28 percent and 30.30 percent respectively in 2024 mainly on account of inflationary pressure. Other expense multiplied by 35.25 percent in 2024 on account of higher profit related provisioning done during the year.
However, it was majorly offset by 238.48 percent superior other income recorded by WAHN in 2024. This was on account of higher income from saving accounts, scrap sales and bad debt recovery. Operating profit enhanced by 22.78 percent in 2024 with OP margin climbing up to 19.96 percent.
WAHN was able to cut down its finance cost by 69 percent in 2024 despite high discount rate. This was done by entirely paying off its external short-term borrowings as well as loan from parent company. WAHN posted 22.30 percent year-on-year rise in its net profit which clocked in at Rs.549.41 million in 2024. This translated into EPS of Rs.61.05 and NP margin of 11.73 percent.
In 2025, WAHN recorded 8.78 percent year-on-year uptick in its net sales which clocked in at Rs. 5096.03 million. While sales volume grew during the year, the company couldn’t pass on the impact of cost hike to their consumers due to intense competition in the industry. Cost of sales mounted by 16.88 percent in 2025 mainly on account of increased prices of raw materials, energy cost and other input cost.
This resulted in 19 percent slippage in gross profit in 2025 with GP margin falling down to 16.76 percent. Administrative expense ticked up by 6.16 percent in 2025; higher payroll expense, board meeting expense, advertisement & publicity expense were greatly offset by lower legal & professional charges incurred during the year. Workforce expanded from 179 employees in 2024 to 199 employees in 2025.
Distribution expense surged by 15.92 percent in 2025 predominantly due to export cess expense incurred during the year. Other expense plummeted by 19.16 percent in 2025 due to lower profit related provisioning done during the year. Other income also shrank by 28.11 percent in 2025 probably due to lower income from financial assets on account of monetary easing.
The company also booked 10.71 percent lesser allowance for ECL in 2025. Operating profit deteriorated by 21.56 percent in 2025 with OP margin slipping to 14.39 percent. Finance cost dropped by 37.66 percent in 2025 due to monetary easing and lower outstanding borrowings. Net profit tapered off by 12.28 percent to clock in at Rs.481.93 million in 2025. This culminated into EPS of Rs.53.55 and NP margin of 9.46 percent.
Recent Performance (1HFY26)
During the first half of the ongoing fiscal year, WAHN recorded a marginal 0.87 percent year-on-year uptick in its net sales which clocked in at Rs.2576.49 million. While local sales ticked up during the period, export sales deteriorated due to closure of Afghan border. Cost of sales inched up by 0.364 percent in 1HFY26 resulting in 3.30 percent uptick in gross profit in 1HFY26 with GP margin clocking in at 17.53 percent versus GP margin of 17.122 percent recorded in 1HFY25.
Administrative and distribution expense surged by 14.32 percent and 20.86 percent respectively in 1HFY26 due to higher payroll expense, advertising expense and travelling & conveyance charges incurred during the period. Lower profit related provisioning resulted in 2.28 percent downtick in other expense in 1HFY26.
Other income also deteriorated by 55 percent in 1HFY26 due to monetary easing. The company booked 69.52 percent lesser allowance for ECL in 1HFY26. WAHN recorded 4.74 percent uptick in its operating profit in 1HFY26 with OP margin clocking in at 15.13 percent versus OP margin of 14.57 percent recorded in 1HFY25.
What proved to have turned tables for WAHN in 1HFY26 was 554.61 percent spike in finance cost. This was on the back of loan obtained from parent company to meet working capital requirements. This translated into 4.37 percent downtick recorded in net profit which clocked in at Rs.210.658 million. This culminated into EPS of Rs.23.41 in 1HFY26 versus EPS of Rs.24.48 recorded in 1HFY25. NP margin sank from 8.62 percent in 1HFY25 to 8.18 percent in 1HFY26.
Future Outlook
The company is well poised to enhance its sales volume and improve its profitability through its recent installation of an additional formaldehyde moulding compound plant of 6000 MT which will take the overall capacity to 19,000 MT per annum.
On the other hand, the presence of existing competitors and new entrants, high raw material prices, utility charges and reduced purchasing power of consumers might hinder price rationalization which may result in margin contraction.
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