Diamond Industries Limited: performance and outlook

Diamond Industries Limited (PSX: DIIL) was incorporated in Pakistan as a private limited company in 1989.

The company is engaged in the manufacturing and sale of foam products and PVA products for domestic and industrial consumption.

Pattern of Shareholding

As of June 30, 2025, DIIL has a total of 9 million shares outstanding which are held by 271 shareholders. Associated companies, undertakings and related parties have the majority stake of 40.83 percent in the company followed by local general public holding 30.66 percent shares of DIIL.

Directors, CEO, their spouse and minor children account for 19.0389 percent shares of the company while joint stock companies hold 9.46 percent shares. The remaining shares are held by other categories of shareholders.

Financial Performance (2021-25)

From no turnover and negative bottomline in 2019, DIIL’s topline and bottomline took an upward flight until 2022. In 2023, the topline slid back and the bottomline entered red zone yet again. In 2024, the company registered no sales and recorded a negative bottomline. In 2025, the company recorded a thinner topline, however, net loss multiplied by manifold.

DIIL’s margins boasted their optimum level in 2021 followed by a downright contraction in the subsequent years. The detailed performance review of the period under consideration is given below.

In 2021, the company terminated its lease arrangement with mutual consent of the parties and restarted its core manufacturing operations. During the year, DIIL recorded net sales of Rs.163.26 million, up 1668.89 percent year-on-year.

Cost of sales stood at Rs.146.58 million in 2021, up 1641.72 percent year-on-year. This resulted in a gross profit of Rs.16.69 million in 2021, up 1949.78 percent year-on-year. GP margin was recorded at 10.22 percent in 2021 versus 8.82 percent in 2020.

Administrative expense contracted by 42.32 percent in 2021 as the company didn’t book any provision for other receivables, provision for loss allowance, provision for penalty and other miscellaneous charges during the year. The company expanded its workforce from 7 employees in 2020 to 329 employees in 2021 due to the resumption of production operations.

DIIL also incurred distribution expense of Rs.3.12 million in 2021 versus no distribution expense recorded in 2020. This primarily included freight & forwarding charges. The company also booked provisioning worth Rs. 2.2 million for WWF and WPPF in 2021. In the previous year, the company booked no other expense. Other income grew by 5 percent in 2021 due to gain recognized from disposal of assets.

DIIL recorded operating profit of Rs.26.77 million in 2021, up 1811.40 percent year-on-year with OP margin of 16.40 percent versus 15.18 percent in 2020. Finance cost ticked up by 12.12 percent in 2021 which largely comprised of finance cost on WPPF not paid in earlier years.

Net profit clocked in at Rs.33.515 million in 2021, up 14738.34 percent year-on-year with EPS of Rs.3.72 and NP margin of 20.53 percent. This was against the EPS of Rs.0.03 and NP margin of 2.45 percent recorded in 2020.

DIIL’s net sales mounted by 993.66 percent in 2022 to clock in at Rs.1785.56 million. High inflation, elevated cost of raw materials, energy charges and Pak Rupee depreciation resulted in a thinner GP margin of 9.86 percent in 2022. Conversely, gross profit enlarged by 954.74 percent in 2022.

Administrative expense posted 80.26 percent year-on-year surge in 2022 due to higher payroll expense as the company further expanded its workforce to 331 employees. Besides, higher legal & professional charges also pushed the administrative expense up in 2022.

Distribution expense escalated by 2305.32 percent in 2022 due to higher freight & forwarding charges incurred during the year. Increased provisioning for WWF and WPPF pushed up other expense by 152.38 percent in 2022.

Other income shrank by 85.82 percent in 2022 as unlike last year, the company didn’t receive rental income and income from disposal of assets in 2022. Operating profit grew by 152.50 percent in 2022 to clock in at Rs.67.60 million; however, OP margin drastically fell to 3.79 percent. Finance cost slid by 98.61 percent in 2022 as the company didn’t pay finance cost of WPPF.

Net profit grew by 57.86 percent to clock in at Rs.52.907 million with EPS of Rs.5.88 and NP margin of 2.96 percent.

After two years of posting robust sales and fat bottomline, DIIL’s net sales plunged by 46.24 percent in 2023. Due to adverse economic and political conditions of the country, the company suffered from lackluster demand during the year.

Moreover, thin foreign exchange reserves of the country resulted in import restrictions which led to non-availability of raw materials to DIIL. The company suspended its operations in the latter half of the year. Cost of sales tumbled by 42.47 percent in 2023 due to low sales, resulting in 80.7 percent thinner gross profit in 2023. GP margin shrank to 3.54 percent in 2023.

DIIL cut down its administrative expense by 36 percent in 2023 due to widespread downsizing, resulting in workforce size of only 20 employees in 2023 from 331 employees in the previous year. Legal & professional charges also considerably dropped in 2023. 43 percent thinner distribution expense incurred by DIIL in 2023 was due to lesser freight & forwarding charges owing to curtailed sales volume.

The company didn’t record any profit related provisioning in 2023. Other income also slumped by 35 percent in 2023 due to lower dividend income. The company registered operating loss of Rs.26.47 million in 2023. Finance cost stood at Rs. 0.37 million in 2023, largely comprising of finance cost paid on WPPF. DIIL posted net loss of Rs.43.65 million in 2023 with loss per share of Rs.4.85.

Adverse politico-economic conditions of the country, high cost of raw materials and sluggish demand didn’t allow DIIL to resume its operations in 2024. Consequently, no net sales and cost of sales were recorded during the year. While DIIL didn’t incur any distribution expense during the year, administrative expense surged by 14.16 percent in 2024 due to higher depreciation expense and utility expense incurred during the year.

Other income strengthened by 296.92 percent in 2024 due to higher dividend income recognized during the year. DIIL posted operating loss of Rs.11.50 million in 2024, down 56.56 percent year-on-year. Finance cost slid by 94 percent in 2024 as the company didn’t pay finance cost on WWF. Net loss stood at Rs.24.23 million, down 44.48 percent year-on-year. This translated into loss per share of Rs.2.69.

In 2025, the company decided to shut down its foam business and replace it with some new and innovative products. However, the company had stockpiles of inventory as semi-finished foam materials, which was sold at throwaway prices. This resulted in net sales of Rs.18.10 million in 2025 versus no net sales recorded in 2024.

DIIL recorded gross loss of Rs.150.88 million in 2025 as the company disposed off its inventory worth Rs.167 million. Administrative expense slid by 24.80 percent in 2025 due to lower payroll expense. No distribution expense and other expense were incurred in 2025. Other income grew by 25.68 percent in 2025 due to higher dividend income.

The company posted operating loss of Rs.153.36 million in 2025, up 1233.87 percent year-on-year. Finance cost diminished by 78.79 percent in 2025 which comprised of bank charges.

DIIL’s loan book largely comprised of amount due to its sponsors which was provided to settle its outstanding external liabilities in the previous years. Net loss for 2025 clocked in at Rs.153.76 million, up 534.53 percent year-on-year. This translated into loss per share of Rs.17.08 in 2025.

Recent Performance (9MFY26)

During the nine-month period of the ongoing fiscal year, DIIL posted a phenomenal 2158.94 percent year-on-year growth in its net sales which clocked in at Rs.361.09 million. This was because after a long period of its operations being suspended, the company resumed its manufacturing operating on January 01, 2026.

The company leased a manufacturing unit located at Multan road from its associated concern to produce spring and foam mattresses, furniture and allied products. Cost of sales mounted by 92.92 percent in 9MFY26. The company posted gross profit of Rs.38.90 million in 9MFY26 versus gross loss of Rs.151.02 million recorded in 9MFY25.

Administrative expense tumbled by 15.25 percent in 9MFY26 likely because of lesser depreciation expense and payroll expense. DIIL incurred distribution expense of Rs.10.54 million in 9MFY26 versus no distribution expense incurred in 9MFY25.

This comprised of freight & forwarding charges incurred during the period under review. Increased dividend income pushed up other income by 62 percent in 9MFY26. DIIL registered operating profit of Rs.37.42 million in 9MFY26 versus operating loss of Rs.152.55 million recorded in 9MFY25. OP margin stood at 10.36 percent in 9MFY26.

Negligible finance cost of Rs.4350 comprised of only bank charges. The company recorded net profit of Rs.27.449 million with EPS of Rs.3.05 in 9MFY26. This was against net loss of Rs.151.348 million and loss per share of Rs.16.82 in 9MFY25. NP margin was recorded at 7.60 percent in 9MFY26.

Future Outlook

After resuming its production in the ongoing fiscal year, the company plans to further expand its operations and enhance its market share. The company has an unwavering support from its sponsors, directors and associated undertakings that will provide the required capital to drive business growth.