Thal Limited (PSX: THALL) was incorporated in Pakistan as a public limited company in 1966. The principal activity of the company is the manufacturing of jute goods, engineering goods, laminate sheets and paper sacks.
Pattern of Shareholding
As of June 30, 2025, THALL has a total of 81.030 million shares outstanding which are held by 4451 shareholders. Individuals have the majority stake of 40.33 percent in the company followed by foreign investors holding 39.93 percent shares of the company.
Banks, DFIS, NBFIs, insurance, pension funds and other financial institutions collectively hold 6.21 percent shares of THALL while mutual funds account for 4.89 percent shares of the company.
Directors, CEO, their spouse and minor children hold 3.40 percent shares. Around 3.11 percent of THALL’s shares are held by joint stock companies and 1.35 percent by charitable trusts. The remaining ownership is distributed among other categories of shareholders.
Historical Performance (2019-24)
During the period under consideration, THALL’s topline and bottomline plunged in 2020, 2023 and 2024. Its margins, which were on a downhill journey until 2020, posted a rebound in 2021. In the subsequent year, gross margin slightly ticked up while operating and net margins descended. In 2023, all the margins registered a plunge.
In 2024 and 2025, gross margin continued to fall and recorded its lowest level in 2025. Conversely, operating margin ticked up in 2024 and then slid in 2025. On the contrary, net margin dropped in 2024 and inched up in 2025(see the graph of profitability ratios). The detailed performance review of each of the years under consideration is given below.
In 2019, THALL’s topline grew by 15.97 percent year-on-year to clock in at Rs.22,374.36 million. This was backed by the growth of 18.40 percent recorded in the engineering segment and 11.30 percent in the packing, building material and allied products segment. Except for jute, all other products produced by the company i.e. auto air conditioners, wire harness, paper bags, alternators and starters registered an uptick in production and sales volumes.
Cost of sales surged by 16.54 percent year-on-year in 2019 on account of higher commodity prices and weakening of Pak Rupee. Gross profit rose by 13.55 percent year-on-year in 2019, however, GP margin fell from 18.98 percent in 2018 to 18.58 percent in 2019.
While there was a hike in distribution expense due to higher provisioning done for ECL and warranty claims; lower payroll expense, repair & maintenance charges, legal & professional expense as well as depreciation translated into 2.61 percent thinner operating expense in 2019 compared to previous year.
Higher provisioning for WWF, WPPF as well as impairment of investment property pushed other expense up by 27.91 percent year-on-year in 2019. However, all of the THALL’s operating and other expense was nullified by a fat other income of Rs.1528.28 million recognized by the company in 2019, which was up 5.68 percent year-on-year. This was on account of a tremendous dividend from mutual funds, interest income as well as gain on the disposal of fixed assets.
As a consequence, operating profit in 2019 turned out to be 13.96 percent bigger than in 2018, yet OP margin slightly slid from 19.76 percent in 2018 to 19.42 percent in 2019. Finance cost mounted by 10.55 percent year-on-year in 2019 due to higher discount rate as well as bank commission.
Net profit expanded by 17.45 percent year-on-year in 2019 to clock in at Rs. 3,154.67 million while NP margin stayed afloat at 14 percent. EPS inched up from Rs.33.15 in 2018 to Rs.38.93 in 2019.
In 2020, THALL’s topline registered 26 percent year-on-year plunge to clock in at Rs.16,600.42 million.
The company’s engineering segment posted 46 percent year-on-year decline in revenue in 2020 on the back of shrunken demand of automobile industry. This was on account of Pak Rupee depreciation and the imposition of additional duties and taxes which inflated the auto prices.
The drop in automobile sales was further exacerbated by the outbreak of COVID-19. As against engineering segment; packaging, building materials and allied products segment posted 12 percent year-on-year rise in revenue in 2020 mainly on account of an encouraging demand of paper bags due to rise in online sales and an enhanced focus on meticulous packaging during the lockdown period.
Owing to the growing demand, the company also upgraded its cement sack manufacturing plant during the year and installed a production line. Cost of sales slumped by 22.90 percent year-on-year in 2020 which translated into 38.52 percent lower gross profit and GP margin falling down to 15.40 percent.
Operating expense mounted by 11.53 percent in 2020 on account of elevated freight expense. Lower provisioning done for WWF and WPPF pushed other expense down by 52.69 percent year-on-year in 2020. Other income also shrank by 27.13 percent year-on-year in 2020 primarily due to lower dividend income.
Operating profit contracted by 45 percent year-on-year in 2020 with OP margin plummeting to 14.40 percent. Finance cost soared by 72.44 percent in 2020 which was particularly due to higher bank charges and commissions.
Net profit slumped by 40.81 percent year-on-year in 2020 to clock in at Rs.1,867.16 million with NP margin slipping to 11.25 percent. EPS dropped to Rs.23.04 in 2020.
In 2021, THALL’s net sales registered a strong rebound of 64.56 percent to clock in at Rs.27,317.19 million. This was on the back of a splendid 100 percent year-on-year rise in the revenue from engineering segment as the automobile sector thrived during the year due to discount rate cuts, economic recovery after the ease of lockdown as well as entry of new market players such as Hyundai Nishat Motor (Private) Limited and Master Motor Corporate (Private) Limited which increased the number of alternatives available to the consumers.
Packaging, building and allied products industry also grew by 31 percent year-on-year in 2021 due to higher export sales. Cost of sales spiked by 61.26 percent in 2021, yet better volume and progressive pricing culminated into 82.68 percent bigger gross profit in 2021 versus previous year. GP margin also picked up to 17.10 percent in 2021.
Operating expense magnified by 26.71 percent year-on-year in 2021 primarily due to exorbitantly higher freight expense and provision for warranty obligations. Other expense intensified by 84.13 percent year-on-year in 2021 due to higher profit-related provisioning.
THALL’s expense was almost offset by 48.32 percent higher other income registered by the company in 2021. This translated into 92.87 percent higher operating profit in 2021 with OP margin climbing up to 16.86 percent.
Finance cost spiked by 105.92 percent in 2021 on account of increased short-term and long-term borrowings obtained during the year. Net profit improved by 86.50 percent year-on-year in 2021 to clock in at Rs.3,482.20 with EPS of Rs.42.97 and NP margin of 12.75 percent.
THALL’s topline grew by another 36.73 percent to clock in at Rs. 37,351.49 million in 2022. This was backed by 42 percent increase in the revenue from engineering segment due to increased automobile sales in the 1HFY22. However, in the latter half of the year, the country witnessed diminishing foreign exchange reserves due to rising commodity prices in the aftermath of Russia-Ukraine crisis and also because of delay in the IMF program.
The other segment of THALL also posted 29 percent rise in its revenue in 2022 on the back of increased demand of Pakistan grain sacks in the export market. Cost of sales hiked by 36.20 percent year-on-year in 2022 on the back of high commodity prices, Pak Rupee depreciation as well as hike in electricity tariff and general inflationary trend in the economy.
However, the company was able to slightly improve its gross margin to 17.41 percent in 2022 by passing on the onus of elevated cost to its consumers.
Operating expense mounted by 20.89 percent in 2022 due to higher freight expense, provision for warranty obligations and escalated payroll expense due to increase in the number of employees from 4367 in 2021 to 5194 in 2022.
Higher exchange loss pushed other expense up by 87.48 percent in 2022. Other income grew by 10.90 percent year-on-year in 2022 due to lofty dividend income and interest income. Operating profit rose by 31.76 percent year-on-year in 2022, however, OP margin slightly fell to 16.25 percent.
Finance cost multiplied by a massive 316.36 percent in 2022 on account of higher discount rate and also because of increased borrowings which radically increased its debt-to-equity ratio from 1.87 percent in 2021 to 10.54 percent in 2022. This significantly diluted the bottomline.
In 2022, THALL’s net profit marched up by 22.26 percent year-on-year to clock in at Rs.4,257.25 million with EPS of Rs.52.54 and NP margin of 11.40 percent.
With 14.53 percent year-on-year slide in net sales, 2023 seems to put an end to the financial glory that THALL had been enjoying for the past two years.
Net sales clocked in at Rs. 31,925 million in 2023. Import restrictions owing to dwindling foreign exchange reserves put a severe dent on the performance of automobile sector, halting its production activities.
Moreover, declining consumer demand due to shrinking purchasing power also affected the overall sales of the auto industry. This translated into 40 percent dip in the sales of engineering segment in 2023. Conversely, packing, building materials and allied products segments registered 26 percent rise in its revenue in 2023 which was the consequence of robust wheat sack demand.
Gross profit dwindled by 32.12 percent year-on-year in 2023 with GP margin slipping to 13.83 percent on account of Pak Rupee depreciation, high commodity prices and steep rise in electricity tariff. Operating expense escalated by 9.82 percent in 2023 on account of higher salaries due to unparalleled inflation and higher vehicle running and travelling expense due to elevated prices of POL products.
While the company suffered hefty exchange loss in 2023, lower provisioning for WWF and WPPF diluted the hike in other expense to 9 percent. Other income magnified by 35.80 percent in 2023 on the back of higher dividend and interest income recognized. Operating profit eroded by 27.22 percent in 2023 with OP margin clocking in at 13.84 percent.
Finance cost soared by 179.69 percent in 2023 due to successive monetary tightening coupled with hefty borrowings which drove the debt-to-equity ratio up to 14.25 percent. Net profit nosedived by 35 percent year-on-year in 2023 to clock in at Rs.2,750.76 million with NP margin of 8.62 percent. EPS also dipped to Rs.33.95 in 2023.
In 2024, THALL’s net sales further dwindled by 16.83 percent to clock in at Rs.26,550.60 million. The challenges faced by the local automobile industry wreaked havoc on the sales of engineering segment which dropped by 25 percent to clock in at Rs.10.30 billion in 2024.
Net sales of building materials and allied product segments also deteriorated by 10 percent to clock in at Rs.16.20 billion in 2024. This was due to lower demand from cement sector, lesser volumes of wheat and high-grade jute in 2025. Lower capacity utilization resulted in poor absorption of fixed cost which coupled with inflationary pressure and elevated energy tariff squeezed the gross profit by 36.66 percent in 2024. GP margin fell to 10.53 percent in 2024.
Operating expense surged by 7.91 percent in 2024 due to higher payroll expense. This was due to increase in minimum wages due to inflation.
THALL streamlined its workforce from 4262 employees in 2023 to 4189 employees in 2024. No exchange loss and lesser provisioning done for WWF and WPPF translated into 83.78 percent lower other expense recorded in 2024. THALL’s operating expense as well as other expense was counterbalanced by 25.92 percent higher other income recorded during the year. This was on account of hefty dividend income, rental income, interest income of bank deposits, TDRs, TFCs and T-bills as well as gain on sale of government securities.
Operating profit dropped by 14.11 percent in 2024, however, OP margin slightly ticked up to 14.29 percent. Finance cost escalated by 79.90 percent in 2024 due to higher discount rate and increased borrowings. Debt-to-equity ratio slid to 13.82 percent in 2024 due to increase in reserves.
THALL’s bottomline plummeted by 20.37 percent to clock in at Rs.2190.43 million in 2024. This translated into EPS of Rs.27.03 and NP margin of 8.25 percent in 2024.
Recent Performance (2025)
After posting year-on-year decline for two successive year, THALL’s topline picked up by 11.53 percent to clock in at Rs.29,611.92 million in 2025. This was due to 50 percent rebound in the sale of engineering segment as its major customer - automobile industry- posted growth in volumes due to lower discount rate, stability of Pak Rupee and launch of new models throughout the year.
Conversely, packaging, building materials and allied products segment remained dull during the year owing to high price of jute and low demand of cement in the local market. Cost of sales surged by 11.90 percent in 2025, resulting in 8.38 percent uptick recorded in gross profit. GP margin ticked down to 10.24 percent in 2025.
Operating expense registered 18.24 percent growth in 2025 due to increased freight charges owing to higher volume recorded by the engineering segment. Increased payroll expense is also a main cause of elevated operating expense in 2025.
Number of employees was increased from 3988 in 2024 to 4060 in 2025. Other expense grew by 19.72 percent in 2025 mainly on account of higher exchange loss. Other income registered 16 percent growth in 2025 due to hefty dividend income from Habib Metro Pakistan (Private) Limited and Indus Motor Company Limited.
THALL recorded 9.14 percent higher operating profit in 2025 with OP margin clocking in at 13.98 percent. Finance cost slipped by 17.84 percent in 2025 due to monetary easing and a decline in overall borrowings. Debt-to-equity fell to 11.62 percent in 2025.
Net profit spiraled by 16.77 percent to clock in at Rs.2557.73 million in 2025. This translated into EPS of Rs.31.57 and NP margin of 8.64 percent in 2025.
Future Outlook
The company is undertaking several measures such as embracing automation, adoption of solar energy, supply chain progression as well as optimization of workflows to curb its cost.
The recovery in macroeconomic indicators will pave way for improved demand. The company is also altering its sales mix to promote high-margin products besides enhancing export sales.