External broker reports(aggregated public sources), Topline Securities

Topline Securities

External broker reports(aggregated public sources)

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Equity Bottom-Up

<ul><li>Nishat Mills (NML) conducted its corporate briefing session today, where the management discussed financial performance and the future outlook of the company.</li><li>Management mentioned that margins are getting competitive in Europe as countries with higher tariff from USA i.e. Bangladesh are now rotating to Europe.</li><li>Future plans include further investment in renewable energy, with 38MW of solar already installed and an additional 4MW under planning, alongside proposed investments in a 45TP steam boiler and battery-storage infrastructure.</li></ul>

Nishat Mills (NML) conducted its corporate briefing session today, where the management discussed financial performance and the future outlook of the company.Management mentioned that margins are getting competitive in Europe as countries with higher tariff from USA i.e. Bangladesh are now rotating to Europe.Future plans include further investment in renewable energy, with 38MW of solar already installed and an additional 4MW under planning, alongside proposed investments in a 45TP steam boiler and battery-storage infrastructure.

Topline Flash Note: Nishat Mills Limited (NML): Corporate Briefing Key Takeaways

<ul><li>Nishat Mills Limited (NML) recorded unconsolidated profit of Rs1,174mn (EPS: Rs3.34) in 4QFY25 up 15% YoY, compared to earnings of Rs1,021mn in 4QFY24 (EPS: Rs2.90). Result came in lower than expectations due to lower-than-expected sales and higher-than-expected effective tax rate.</li><li>Net sales rose 9% YoY while fell 4% QoQ to Rs43bn in 4QFY25. We await detailed accounts to gain clarity on the breakup of these sales.</li><li>The company also announced a cash dividend of Rs2.0/share, equivalent to 11.7% payout ratio (vs 16.6% in FY24), which was lower than expectations.</li></ul>

Nishat Mills Limited (NML) recorded unconsolidated profit of Rs1,174mn (EPS: Rs3.34) in 4QFY25 up 15% YoY, compared to earnings of Rs1,021mn in 4QFY24 (EPS: Rs2.90). Result came in lower than expectations due to lower-than-expected sales and higher-than-expected effective tax rate.Net sales rose 9% YoY while fell 4% QoQ to Rs43bn in 4QFY25. We await detailed accounts to gain clarity on the breakup of these sales.The company also announced a cash dividend of Rs2.0/share, equivalent to 11.7% payout ratio (vs 16.6% in FY24), which was lower than expectations.

Nishat Mills Limited (NML): 4QFY25 EPS at Rs3.34 - Earnings Lower Than Industry Expectations

<ul><li>We have revised down our earnings estimates for Nishat Mills (NML) by average 33% for FY25 and FY26 to Rs18.49 and Rs19.11 due to lower-than-expected gross margins.</li><li>Despite the decline in earnings, we maintain our BUY stance on the company with a June 2026 target price of Rs225, suggesting a total return of 60% including a dividend yield of 2%.</li><li>The Sum of The Part (SOTP) value of the company arrives at Rs302/share, indicating a 53% discount to the market price.</li></ul>

We have revised down our earnings estimates for Nishat Mills (NML) by average 33% for FY25 and FY26 to Rs18.49 and Rs19.11 due to lower-than-expected gross margins.Despite the decline in earnings, we maintain our BUY stance on the company with a June 2026 target price of Rs225, suggesting a total return of 60% including a dividend yield of 2%.The Sum of The Part (SOTP) value of the company arrives at Rs302/share, indicating a 53% discount to the market price.

Nishat Mills Limited (NML): BUY Maintained; Earnings Revised Due to Lower Margins; SOTP Value Higher

Macroeconomics

<ul><li>Government has abolished the Export Development Surcharge (EDS) which is 0.25% applicable on good exports.</li><li>To highlight, Pakistan's goods export remains at US$10.6bn in 4MFY26 vs. US$10.4bn in SPLY.</li><li>In topline universe, our back of the envelope shows, NML and ILP bottom line is likely to expand by 2.5%-2.9% while cement sector will have minimal impact as well.</li></ul>

Government has abolished the Export Development Surcharge (EDS) which is 0.25% applicable on good exports.To highlight, Pakistan's goods export remains at US$10.6bn in 4MFY26 vs. US$10.4bn in SPLY.In topline universe, our back of the envelope shows, NML and ILP bottom line is likely to expand by 2.5%-2.9% while cement sector will have minimal impact as well.

Topline Flash Note: Impact Of Export Development Surcharge (EDS)

<ul><li>The United States of America (USA) has announced revised reciprocal tariffs on trading partners on Jul 31, 2025. This was as per the Aug 01, 2025 deadline announced by the US government for making negotiations with trade partners over tariffs.</li><li>To recap, Pakistan exports US$6bn goods to USA (18%) and is country’s largest trading partner.</li><li>Last night, revised tariffs were announced by the US government, wherein Pakistan will now face reciprocal tariffs of 19% compared to earlier rate of 29%, reducing the impact by around 10ppts. However, some of the peer countries who were at much higher bracket before are almost at par with Pakistan now.</li></ul>

The United States of America (USA) has announced revised reciprocal tariffs on trading partners on Jul 31, 2025. This was as per the Aug 01, 2025 deadline announced by the US government for making negotiations with trade partners over tariffs.To recap, Pakistan exports US$6bn goods to USA (18%) and is country’s largest trading partner.Last night, revised tariffs were announced by the US government, wherein Pakistan will now face reciprocal tariffs of 19% compared to earlier rate of 29%, reducing the impact by around 10ppts. However, some of the peer countries who were at much higher bracket before are almost at par with Pakistan now.

Pakistan Market - Pakistan To Face 19% Reciprocal US Tariffs; Better Than India, But Largely At Par With Vietnam And Bangladesh

Pakistan

Nishat Mills Limited is a textile manufacturing company.  The Company spins, combs, weaves, bleaches, dyes, prints, and buys and sells yarn, linen, other cloth, and other goods.  Nishat Mill's products and fabrics are made from raw cotton and synthetic fiber.  The Company also owns a power plant that generates, accumulates, distributes, and supplies electricity.

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Nishat Mills (NML PA)

Topline Flash Note: Nishat Mills Limited (NML): Corporate Briefing Key Takeaways

Nishat Mills (NML) conducted its corporate briefing session today, where the management discussed financial performance and the future outlook of...

Topline Securities

Nishat Mills Limited (NML): 4QFY25 EPS at Rs3.34 - Earnings Lower Than Industry Expectations

Nishat Mills Limited (NML) recorded unconsolidated profit of Rs1,174mn (EPS: Rs3.34) in 4QFY25 up 15% YoY, compared to earnings of Rs1,021mn in...

Topline Securities

Nishat Mills Limited (NML): BUY Maintained; Earnings Revised Due to Lower Margins; SOTP Value Higher

We have revised down our earnings estimates for Nishat Mills (NML) by average 33% for FY25 and FY26 to Rs18.49 and Rs19.11 due to...

Topline Securities

Topline Flash Note: Impact Of Export Development Surcharge (EDS)

Government has abolished the Export Development Surcharge (EDS) which is 0.25% applicable on good exports. To highlight, Pakistan's goods export...

Topline Securities

Pakistan Market - Pakistan To Face 19% Reciprocal US Tariffs; Better Than India, But Largely At Par With Vietnam And Bangladesh

The United States of America (USA) has announced revised reciprocal tariffs on trading partners on Jul 31, 2025. This was as per the Aug 01, 2025...

Topline Securities

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