Rupali Polyester Limited (PSX: RUPL) was incorporated in Pakistan as a public limited company in 1980. The principal activity of the company is the manufacturing and sale of polyester products.
Pattern of Shareholding
As of June 30, 2024, RUPL has a total of 34.068 million shares outstanding which are held by 671 shareholders. Trusts have the majority stake of 81.04 percent in the company followed by individuals holding 12.45 percent shares.
Directors, CEO, their spouse and minor children account for 3.085 percent of RUPL’s outstanding shares.
Around 2.163 percent of the company’s shares are held by executives and 1.24 percent by Banks, DFIs, NBFIs, Insurance companies, Modarabas & Mutual Funds. The remaining ownership is distributed among other categories of shareholders.
Financial Performance (2019-25)
Over the period under consideration, RUPL’s topline slid thrice i.e. in 2020, 2024 and 2025. Conversely, its bottomline posted a decline in all the years except 2021 and 2022. In 2023, RUPL posted net loss which further enlarged in 2024 and 2025.
The company’s margins which fell in 2019 improved in 2020 and 2021 (except for a marginal downtick in net margin in 2020). In 2022, net margin rose while gross and operating margins plunged.
In the subsequent years, the margins followed a downward trajectory and registered their lowest level in 2025 (see the graph of profitability ratios). The detailed performance review of the period under consideration is given below.
In 2019, RUPL’s topline posted a staggering year-on-year growth of 49.79 percent to clock in at Rs.9053.74 million. In line with the rising demand, the company’s production volume also increased by 21 percent year-on-year in 2019 (see the graph of production achieved).
However, in the 2HFY19, there were country-wide strikes by textile traders and manufacturers for the levy of sales tax on the entire textile value chain. Moreover, regulatory duty on imported polyester filament yarn (PFY) was reduced to zero in 2019 budget. This distorted the level playing field in the polyester industry and gave competitive advantage to the imported products.
Moreover, the requirement of CNIC from unregistered suppliers also raised concerns in the industry. Cost of sales grew by 50.73 percent in 2019 on account of inflationary pressure, imposition of 17 percent sales tax in the entire value chain, higher utility charges and fuel cost.
The company was not able to pass on the cost hike on to its consumers because of cheaper alternative (imported polyester) available in the market. RUPL’s gross profit grew by 35.22 percent year-on-year in 2019, however, GP margin fell from 6.01 percent in 2018 to 5.42 percent in 2019.
Distribution expense escalated by 38.20 percent year-on-year in 2019 mainly on account of higher freight and forwarding charges.
Administrative expense inched up by 2.16 percent year-on-year in 2019 primarily due to inflationary pressure and utility charges. Lower scrap sales and lower gain on re-measurement of fair value of investment property trimmed down other income by 24.70 percent in 2019.
Other expense also marched down by 34.10 percent in 2019 on account of lesser charity & donations. As a consequence, there was 46 percent year-on-year growth in operating profit. OP margin slightly marched down from 3.88 percent in 2018 to 3.78 in 2019.
Finance cost surged by 41.64 percent in 2019 on the back of higher discount rate despite the fact that RUPL’s outstanding borrowings plunged during the year. This culminated into 14.84 percent year-on-year slide in the company’s net profit which stood at Rs.54.974 million in 2019. This translated into EPS of Rs.1.61 in 2019 versus EPS of Rs.1.89 recorded in 2018. NP margin also slumped from 1.07 percent in 2018 to 0.61 percent in 2019.
RUPL couldn’t cope up with the economic uncertainty brought about by COVID-19 and lost its topline by 34.68 percent in 2020. Topline was recorded at Rs.5914.25 million in 2020. RUPL’s production volume eroded by 31 percent year-on-year in 2020 due to sluggish demand as well as lockdown imposed by the government.
While the government had provided relaxation on the CNIC requirement from the traders which created impetus for local sales during 9MFY20, however, no demand in the 4QFY20 counterbalanced the sales of the first three quarters. Cost of sales dropped by 35.53 percent in 2020, resulting in 19.87 percent thinner gross profit.
On the positive front, GP margin saw an uptick to clock in at 6.65 percent in 2020. Distribution expense tumbled by 26.51 percent in 2020 on the back of lower freight & forwarding charges. RUPL was able to squeeze its administrative expense by 1.39 percent in 2020.
Other income registered a stunning 125.78 percent rise in 2020 as the company recorded huge rise in gain on re-measurement of fair value of investment property in 2020. Lower charity & donations pushed other expense down by 30.69 percent in 2020.
Controlled expenses and robust other income resulted in a meager 0.26 percent slide in operating profit in 2020 despite massive decline in sales. OP margin greatly improved to clock in at 5.78 percent in 2020. Finance cost registered 38.37 percent spike in 2020 as discount rate was high for most part of the year.
Furthermore, RUPL’s short-term borrowings also rose during the year. This translated into a year-on-year drop of 39.04 percent in the company’s net profit which clocked in at Rs.33.510 million in 2020 with EPS of Rs.0.98. NP margin slightly ticked down to 0.57 percent in 2020.
In 2021, RUPL’s net sales recorded year-on-year growth of 27.73 percent to clock in at Rs.7554.43 million. Production volume rose by 42 percent during the year which bear testament to improved sales volume and resumption of economic activity after the slowdown experienced on account of COVID-19.
Cost of sales also hiked by 21.55 percent in 2021 owing to higher cost of raw materials as well as elevated energy charges.
However, with improved demand in the local market, the company was able to pass on the onus of cost hike to its consumers. This resulted in 114.48 percent higher gross profit recorded by the company in 2021 with GP margin reaching its optimum level of 11.17 percent.
Distribution expense expanded by 29.33 percent in 2021 as higher sales volume drove up the freight charges.
Administrative expense eroded by 2.58 percent in 2021. Higher profit related provisioning resulted in 268.98 percent surge in other expense in 2021. Conversely, lower fair value gain on investment property drove other income down by 44.51 percent in 2021.
RUPL recorded 100.46 percent stronger operating profit in 2021 with OP margin of 9.07 percent. Finance cost shrank by 40.30 percent in 2021 on account of lower discount rate combined with reduced borrowings.
As a consequence, net profit magnified by 771.58 percent in 2021 to clock in at Rs.292.065 million with EPS of Rs.8.57 and NP margin of 3.87 percent.
In 2022, RUPL’s topline magnified by 48.64 percent to clock in at Rs.11,229.28 million. Due to dumping of low quality imported PFY in the market the company’s sales volume was adversely affected in the 4QFY22. This is also evident in 6 percent lower production volume achieved by the company in 2022.
Moreover, global commodity super cycle induced by Russia-Ukraine war coupled with Pak Rupee depreciation, hike in energy prices and indigenous inflationary pressure drove the cost of sales up by 49.56 percent in 2022. Gross profit grew by 41.40 percent in 2022, however, GP margin ticked down to 10.63 percent.
Distribution and administrative expense spiked by 13.54 percent and 21.65 percent respectively in 2022 which was the result of higher freight charges and payroll expense. Other expense mounted by 90.81 percent in 2022 due to increased donations and profit related provisioning.
During 2022, RUPL didn’t book any gain on fair value of investment property, resulting in 9.11 percent lower other income.
Operating profit augmented by 36.90 percent in 2022, however, OP margin slipped to 8.35 percent.
Despite monetary tightening taking place during the year, RUPL was able to cut down its finance cost by 48.08 percent in 2022 by considerably settling its outstanding borrowings. This translated into 194.83 percent rise in net profit which clocked in at Rs.861.092 million in 2022 with EPS of Rs.25.27 and NP margin of 7.67 percent.
RUPL’s topline registered a marginal 2.65 percent year-on-year growth to clock in at Rs.11,526.87 million in 2023. While anti-dumping duty was imposed on imported PSY, lackluster demand by the textile industry due to overall economic slowdown resulted in 13 percent lower production volume attained by RUPL in 2023.
Smuggling of imported products further restrained the demand in the local market. Cost of sales registered a surge of 12.91 percent in 2023 on account of global commodity super cycle, Pak Rupee depreciation, energy supply crisis, escalated power tariff etc.
Gross profit thinned down by 83.62 percent in 2023 with GP margin sliding to 1.70 percent. Distribution and administrative expense soared by 14.81 percent and 15.77 percent respectively in 2023 on account of higher prices of POL products which drove up the freight charges and also because of higher payroll expense incurred during the year.
Operating expense, to a great extent, was counterbalanced by 235.85 percent higher other income which was mainly the result of fair value gains on investment property. Other expense dipped by 86.24 percent in 2023 due to no provisioning done for WWF and WPPF.
Operating profit shrank by 81.67 percent in 2023 with OP margin moving down to 1.49 percent.
RUPL endured massive 372.12 percent spike in its finance cost in 2023 on account of unprecedented level of discount rate and higher short-term borrowings. Increased borrowings resulted in the company’s gearing ratio mounting to 25 percent in 2023 from 11 percent in 2022. Higher finance cost coupled with the imposition of super tax pushed RUPL in net loss of Rs.184.828 million in 2023 with loss per share of Rs.5.43.
In 2024, RUPL’s net sales declined by 9 percent year-on-year to clock in at Rs.10,485.06 million. This was due to insufficient sales volume which was the product of economic instability and influx of imported goods at low prices. Production volume dropped by 18 percent in 2024.
The company increased the prices of its products to offset the cost pressure particularly elevated prices of PTA and MEG and skyrocketed energy tariffs. Gross profit shrank by 88.05 percent in 2024 with GP margin drastically falling down to 0.22 percent. Lower sales volume resulted in 0.96 percent slump in distribution expense in 2024.
Conversely, administrative expense inched up by 2.52 percent in 2024 owing to inflationary pressure. This was despite the fact that the company streamlined its workforce from 1262 employees in 2023 to 1176 employees in 2024.
The company recorded 45.74 percent drop in its other income in 2024 due to high-base effect as the company recorded hefty fair value gain on investment property in the previous year. Scrap sales also dipped in 2024. Other expense mounted by 51.13 percent in 2024 due to generous donations disbursed during the year.
RUPL incurred operating loss of Rs.126.02 million in 2024. To add to ado, finance cost surged by 85.67 percent in 2024 on the back of high discount rate and increased short-term borrowings to meet working capital requirements.
Gearing ratio mounted to 39 percent in 2024. The company posted highest ever net loss of Rs.822.505 million in 2024, up 345 percent year-on-year. This translated into loss per share of Rs.24.14 in 2024.
Recent Performance (2025)
In 2025, RUPL recorded a massive 41.23 percent year-on-year slide in its topline which clocked in at Rs.6162.28 million. This was due to weaker demand in the domestic market owing to a decline in economic activity and rigorous competition from dumped imported products.
While anti dumping duties were imposed, however, they proved to be ineffective on account of stays provided by the High Court. A petite dumping margin of 5 percent was levied on major Chinese importers resulting in the continuation of price distortion in the local market.
Lower demand, inability to revise the prices coupled with soaring energy tariff and elevated raw materials (PTA and MEG) cost resulted in gross loss of Rs.1079.19 million in 2025. This was the first time that the company posted gross loss. Lower sales volume culminated into 22.50 percent drop in distribution expense in 2025.
Administrative expense also nosedived by 4 percent in 2025 as the company was in the process of restructuring in workforce. Other expense escalated by 73.38 percent in 2025 apparently on the back of higher donations. Other income improved by 41.98 percent in 2025 seemingly on account of higher fair value gain on investment property.
RUPL’s operating loss multiplied by 830.67 percent to clock in at Rs.1172.85 million in 2025. Finance cost tapered off by 29.15 percent in 2025 due to monetary easing and a slide in short-term borrowings. It is to be noted that RUPL acquired a long-term loan of Rs.1220.417 million in the last quarter of 2025.
The company had no long-term loans on its books until March 2025. This gives a hint of some expansionary plan or BMR of the existing plant by the company. Net loss escalated by 85.58 percent to clock in at Rs.1526.328 million in 2025. This translated into loss per share of Rs.44.80 in 2025.
Future Outlook
Stability in the economic backdrop as evident by stable currency, accommodative monetary cycle and lowering inflation will result in improvement in the demand of PSF and PFY.
The company is all set to grab this opportunity by installing modern machinery which will not only boost its production capacity but will also provide operational efficiency. However, for the local manufacturers to fully benefit from the forecasted economic recovery, the government needs to take strict measures to curb the dumped imports.