National Silk & Rayon Mills Limited (PSX: NSRM) was incorporated in Pakistan as a public limited company in 1950. The company is engaged in dyeing, bleaching, finishing and embroidery of fabrics.
Pattern of Shareholding
As of June 30, 2025, NSRM has a total of 15.55 million shares outstanding which are held by 614 shareholders. The company’s leadership, including its Directors, CEO, their spouse and minor children,has the majority stake of 98.43 percent in the company followed by local general public holding 1.56 percent shares of NSRM.
The remaining ownership is distributed among NIT & ICP, Insurance companies and joint stock companies.
Historical Performance (2019-25)
Except for a year-on-year fall in 2020, NSRM’s topline has posted growth over the period under consideration. Conversely, its bottomline and margins followed a downward trajectory until 2020 and then posted a rebound in the following year only to get back to its downhill journey in 2022 and 2023.NSRM posted net loss in 2020 and 2023.
In 2024 and 2025, NSRM’s bottomline and margins considerably recovered. The detailed performance review of the period under consideration is given below.
In 2019, NSRM’s topline grew by 8.57 percent year-on-year to clock in at Rs.930.94 million. The company had a rated capacity of 57.6 million meters in cloth processing unit and 8.12 million meters in embroidery processing unit. The company utilized 58.47 percent of its cloth processing capacity in 2019, up from 57.47 percent in 2018.
Conversely, the capacity utilization of embroidery processing fell from 82.62 percent in 2018 to 70.76 percent in 2019 (see the graph of capacity utilization). Cost against services provided grew by 10.28 percent in 2019 on account of high-power tariff as well as elevated raw material charges in the wake of currency depreciation.
This pushed the gross profit down by 8.62 percent in 2019 with GP margin hovering around 7.63 percent, down from GP margin of 9.10 percent recorded in 2018. Operating expense grew marginally by 1.22 percent in 2019 due to uptick in repair & maintenance, vehicle running & maintenance as well as fee and subscription charges.
Operating profit slid by 14.91 percent in 2019 with OP margin falling down to 3.66 percent from OP margin of 4.68 percent posted in 2018. Finance cost shrank by 9.59 percent in 2019 due to a slide in bank commission. This was despite higher discount rate and increased borrowings in 2019 which drove the gearing ratio up from 9 percent in 2018 to 10.14 percent in 2019.
Net profit eroded by 57.47 percent in 2019 to clock in at Rs.17.41 million with EPS of Rs.1.12, down from EPS of Rs.2.63 registered in 2018. NP margin also narrowed down from 4.77 percent in 2018 to 1.87 percent in 2019.
In 2020, NSRM’s topline slipped by 13.77 percent to clock in at Rs.802.73 million. The company’s capacity utilization drastically fell (see the graph of capacity utilization) on account of lockdown imposed due to breakout of COVID-19. Cost of the services provided also declined, however, with a lower magnitude of 10.47 percent on account of diminishing value of local currency.
This squeezed the gross profit by 53.72 percent in 2020 with GP margin marching down to 4.10 percent in 2020. Operating expense escalated by 3.85 percent in 2020 on the back of hike in electricity charges as well as payroll expense. GIDC charges of Rs.28.49 million incurred in 2020 on account of the decision of Supreme Court of Pakistan in favor of government magnified the other expense by 1441.79 percent in 2020.
NSRM incurred operating loss of Rs.36.41 million in 2020. Finance cost magnified by 92.23 percent in 2020 due to higher discount rate for most part of the year coupled with increased borrowings and bank commission. Gearing ratio jumped up to 10.87 percent in 2020. NSRM sustained net loss of Rs.46.91 million in 2020 with loss per share of Rs.3.02.
NSRM’s topline posted a staggering recovery of 35.42 percent to clock in at Rs.1087.04 million in 2021. The company’s capacity utilization improved, however, couldn’t reach the pre-COVID level. As the company started partially sourcing its raw materials locally due to restrictions imposed during the lockdown period and also because of upward revision in the rates of its services, its gross profit rebounded by 216.93 percent in 2021 with GP margin registering its highest level of 9.60 percent. Operating expense spiked by 14.51 percent in 2021 primarily due to higher payroll expense incurred during the year.
NSRM also posted net other income of Rs.4.94 million in 2021 as it recognized exchange gain and gain on disposal of fixed assets. The reversal of GIDC payable also buttressed other income and drove other expense down in 2021. Operating profit was recorded at Rs.64 million in 2021 with OP margin clocking in at 5.89 percent.
Despite lower discount rate, finance cost inched up by 12.35 percent in 2021 due to higher short-term borrowings. NSRM touted net profit of Rs.45.09 million in 2021 culminating into EPS of Rs.2.90 and NP margin of 4.15 percent.
NRSM posted 19.86 percent year-on-year rise in its topline which clocked in at Rs.1302.94 million in 2022. The capacity utilization of the company’s cloth processing unit fell to 48.49 percent in 2022 while the capacity utilization of embroidery processing slightly improved to clock in at 39.43 percent.
Cost against services provided spiked by 21.21 percent in 2022 on account of high inflation, elevated energy charges, and Pak Rupee depreciation. While gross profit improved by 7.16 percent in 2022, GP margin ticked down to 8.57 percent. NSRM kept a check on its operating expense which grew by just 1.16 percent in 2022.
Operating profit grew by 2.60 percent in 2022; however, OP margin slid down to 5 percent. Finance cost surged by 70.43 percent in 2022 on account of monetary tightening and unwinding of discount on GIDC payable. Net profit slumped by 68.39 percent to clock in at Rs.14.25 million in 2022 with NP margin of 1.1 percent and EPS of Rs.0.92.
In 2023, NSRM’s topline registered a healthy year-on-year growth of 34.93 percent to clock in at Rs.1758.08 million. However, topline growth couldn’t trickle down into net profit on account of exorbitant rise in material cost due to high international commodity prices, Pak Rupee depreciation as well as high indigenous inflation. To top it off, hike in energy tariff also took its toll on the gross profit which tumbled by 52.11 percent year-on-year in 2023.
GP margin touted its lowest level of 3 percent in 2023. Capacity utilization of both the segments dropped to its lowest levels since 2018 which gives a hint that upward price revision had a key role to play in yielding a robust topline in 2023. Operating expense grew by 13.70 percent in 2023 due to higher payroll expense as the number of employees increased from 379 in 2022 to 394 in 2023.
Travelling & conveyance, vehicle running as well as utility charges also hiked in 2023. Operating profit in 2023 turned out to be 92.15 percent smaller than it was in the previous year, which translated into OP margin of 0.30 percent. Despite towering discount rate, the company was able to trim down its finance cost by 31.21 percent in 2023 due to significant diminution in short-term borrowings coupled with lower unwinding of discount on GIDC payable.
Gearing ratio declined to 5.83 percent in 2023 from 18.11 percent in 2022. Yet it couldn’t help the bottomline which posted net loss of Rs.22.93 million in 2023 with loss per share of Rs.1.47.
In 2024, NSRM’s topline grew by 22.53 percent year-on-year to clock in at Rs.2154.20 million. Capacity utilization of both cloth processing and embroidery processing units grew to clock in at 44.23 percent and 37.16 percent respectively in 2024. This translated into an output of 27.78 million meters in cloth processing unit and 3.2 million meters in embroidery processing unit.
While elevated energy tariff and heightened input costs continued to haunt the company in 2024, stable exchange rate resulted in 190.92 percent improvement in gross profit with GP margin climbing up to 7.22 percent. Operating expense grew by 4.68 percent in 2024 due to higher payroll expense incurred in the distribution network coupled with elevated vehicle running expense, communication expense as well as insurance expense incurred during the year. The company trimmed down its workforce from 394 employees in 2023 to 381 employees in 2024.
As against net other income of Rs.3.62 million recorded in 2023, NSRM posted net other expense of Rs.3.41 million in 2024 due to profit related provision and allowance for ECL booked during the year. Operating profit strengthened by 1797.87 percent in 2024 to clock in at Rs.97.82 million. This translated into OP margin of 4.54 percent in 2024.
NSRM cut down its finance cost by 84 percent in 2024 as the company secured interest free loan from its director and also didn’t record any interest on WPPF and unwinding of discount on GIDC payable in 2024. The company posted net profit of Rs.66.303 million in 2024 with EPS of Rs.4.26 and NP margin of 3.1 percent.
In 2025, NSRM posted year-on-year growth of 13.80 percent in its net sales which clocked in at Rs.2451.39 million. Capacity utilization slightly improved during the year (see the graph). Export sales of dyed fabric deteriorated during the year, however, the same product gained traction in the local market.
Dyeing services, which are the main source of revenue for the company, followed by embroidery services mustered staggering growth in 2025. Cost of sales surged by 13.12 percent in 2025 due to higher raw material and energy cost. However,the company’s ability to attain product diversification coupled with controlled inflation and stable exchange rate enabled it to attain 22.43 percent improvement in its gross profit in 2025 with GP margin ticking up to 7.77 percent.
Operating expense dipped by 0.52 percent in 2025 due to lower payroll expense. This was despite the fact that the company expanded its workforce from 381 employees in 2024 to 391 employees in 2025. Other expense increased by 156.72 percent in 2025 due to sales tax refund written off during the year coupled with increased provisioning done for WWF, WPPF and ECL.
Other income grew by 23.13 percent in 2025 due to gain recognized on the disposal of property, plant & equipment, higher scrap sales, and increased profit on saving deposits. NSRM recorded 17 percent improvement in its operating profit in 2025 with OP margin inching up to 4.67 percent.
Finance cost escalated by 119.76 percent in 2025 due to an uptick recorded in short-term borrowings during the year. On the flipside, it paid off the interest free loan obtained from its director in 2025. Net profit grew by 25.78 percent to clock in at Rs.83.398 million in 2025. This translated into EPS of Rs.5.36 and NP margin of 3.40 percent in 2025.
Recent Performance (1QFY26)
During the first quarter of the ongoing fiscal year, NSRM’s topline ticked up by 7.052 percent to clock in at Rs.643.219 million. Improvement in macroeconomic indicators played a pivotal role in reviving the demand and controlling the cost.
Moreover, the company’s efforts to attain sales mix optimization, finding new avenues of revenue generation both within and outside the home market as well as implementation of cost control measures also played a role in generating 41.52 percent higher gross profit in 1QFY26 with GP margin clocking in at 7.14 percent versus GP margin of 5.40 percent recorded in 1QFY25.
Higher salaries of sales force resulted in 21.20 percent escalation in distribution expense in 1QFY26. The company apparently expanded its sales force to attain deeper market penetration of the existing markets and tapping new markets. Administrative expense ticked up by 1.26 percent in 1QFY26 probably due to higher payroll expense. Higher provisioning for WWF and WPPF resulted in 5.46 percent taller other expense in 1QFY26.
Conversely, other income deteriorated by 46.21 percent due to lower profit on bank deposits and short-term investments.
NSRM recorded 73.54 percent stronger operating profit in 1QFY26 with OP margin clocking in at 4.64 percent versus OP margin of 2.86 percent recorded in 1QFY25. Despite monetary easing, finance cost surged by 69.96 percent in 1QFY26 due to spike in lease liabilities. Net profit multiplied by 86.62 percent in 1QFY26 to clock in at Rs.20.073 million. This culminated into EPS of Rs.1.29 in 1QFY26 versus EPS of Rs.0.69 recorded in 1QFY25. NP margin also picked up from 1.79 percent in 1QFY25 to 3.12 percent in 1QFY26.
Future Outlook
Pakistan’s textile sector has faced myriad challenges of-late due to depressed local and international demand, shrunken cotton yield due to adverse weather conditions, high taxation, and elevated energy charges. However, with the improvement in macroeconomic indicators, NSRM is optimizing its cost levels and assessing fresh avenues of revenue generation to optimize its margins and profitability.