Nimir Resins Limited

Nimir Resins Limited (PSX: NRSL) was incorporated in Pakistan in 1964 as a public limited company and then converted into a public limited company in 1991. The company is engaged in the manufacturing of coating resins, composite resins (UPR), textile auxiliaries, optical brightener and paper surface sizing agents. Pattern of Shareholding As of June 30, 2025, NRSL has a total of 141. 32 million shares outstanding which are held by 5093 shareholders. Associated companies, undertakings and related parties have the majority stake of 45. 45 percent in the company followed by local general public holding 32. 91 percent shares. Directors, CEO, their spouse and minor children account for 19. 84 percent shares of the company while joint stock companies hold 1. 41 percent shares. The remaining ownership is distributed among other categories of shareholders. Financial Performance (2021-25) Except for a dip in 2024, NRSL’s topline rode an upward trajectory over the period under consideration. Conversely, its bottonmline slid in 2024 and 2025. The gross and operating margins inclined until 2022 followed by a marginal dip in 2023. In 2024, NRSL’s gross margin ticked up to attain its highest level while operating margin continued to slide. As against gross and operating margins, net margin rebounded in 2021 and then began to erode since 2022. In 2025, all the margins weakened to register their lowest level. The detailed performance review of each of the years under consideration is given below. NRSL’s net sales which weakened in 2020 rebounded by a robust 39. 53 percent year-on-year to clock in at Rs. 6277. 70 million in 2021. This not only came on the back of higher volumes but also windfall gains as the company purchased huge stocks of inventory before the lockdown period at lower prices which was sold afterwards at significantly higher prices. During the year, the company increased its production capacity to 45, 600 MT and achieved capacity utilization of 73 percent. Gross profit leaped by 57 percent year-on-year in 2021 with GP margin inclining to 12. 65 percent from 11. 24 percent in 2020. Distribution expense magnified by 29. 51 percent year-on-year in 2021 due to higher salaries as well as increased packing, carriage and forwarding charges incurred during the year on account of higher volumes as well as hike in freight rates as shipments which were held back due to COVID-19 started clearing. Administrative expense also escalated by 24. 10 percent year-on-year in 2021 on account of higher payroll expense, although number of employees was same as last year i. e. 127 employees. Operating profit enlarged by 65. 56 percent year-on-year in 2021 with OP margin registering considerable rise to clock in at 10. 40 percent from 8. 76 percent in 2020. Other expense mounted by 48. 18 percent year-on-year in 2021 due to increased profit related provisioning as well as provisioning done for ECL and obsolescence of stock booked during the year. Finance cost slipped during the year by 39. 12 percent year-on-year in 2021 due to monetary easing. This was despite the fact that NRSL’s long-term borrowings significantly increased during the year for CAPEX as well as for the disbursement of salaries & wages under SBP Refinance Scheme. NRSL’s net profit grew by 182 percent year-on-year in 2021 to clock in at Rs. 358. 75 million with EPS of Rs. 2. 54 and NP margin of 5. 71 percent – the highest NP margin achieved during the period under consideration. This was against the EPS of Rs. 0. 45 and NP margin of 2. 83 percent registered in 2020. Another positive development that took place during the year was 20 percent increase in the net worth of the company to clock in at Rs. 2070 million. Moreover, accumulated losses were completely wiped off creating room for future dividend payments. In 2022, NRSL recorded 31. 76 percent year-on-year rise in its topline which clocked in at Rs. 8271. 38 million. Significant increase in the prices of global commodities particularly feedstock prices drastically increased the cost of sales, however, NRSL’s competitive prices pushed gross profit up by 35. 36 percent year-on-year in 2022. GP margin also improved to clock in at 13 percent in 2022. During the year, NRSL’s capacity utilization slipped to 66. 88 percent. Distribution expense escalated by 20. 36 percent year-on-year in 2022 on account of higher payroll expense as well as packing, carriage and forwarding charges. Administrative expense also signifies high inflation as it hiked by 18. 41 percent year-on-year in 2022 on account of higher payroll expense. Operating profit ticked up by 38. 82 percent year-on-year in 2022 with OP margin rising up to 10. 95 percent. A considerable hike of 109. 16 percent in other expense in 2022 was the consequence of higher exchange loss as well as provisioning related to profit, ECL and inventory obsolescence. Finance cost surged by 89. 68 percent year-on-year in 2022 on the back of high discount rate as well as momentous increase in long-term and short-term borrowings obtained during the year. This, coupled with the imposition of 10 percent super tax by the government greatly diluted the bottomline growth. Net profit grew by a mere 2. 27 percent year-on-year in 2022 to clock in at Rs. 366. 87 million with EPS of Rs. 2. 6 and NP margin of 4. 44 percent. In 2023, NRSL’s topline posted a subdued 13. 29 percent year-on-year growth to clock in at Rs. 9370. 91 million. Capacity utilization inched down to 57. 4 percent due to supply chain impediments on account of import restriction as well as reduced demand due to restricted business activity across the sectors. Cost of sales hiked by 13. 43 percent year-on-year in 2023 due to drastic hike in the international prices of raw materials which was further worsened by Pak Rupee depreciation. The company was able to revise its prices accordingly which is evident from its GP margin which remained largely intact during the year. Gross profit also enlarged by 12. 35 percent year-on-year in absolute terms in 2023. Distribution expense registered a massive 31. 12 percent year-on-year growth in 2023 as higher prices of POL products took its toll on freight as well as travelling and conveyance expense incurred during the year. Administrative expense multiplied by 22. 78 percent year-on-year in 2023 due to higher payroll expense as the number of employees grew from 125 in 2022 to 135 in 2023 which inflated the payroll expense. Operating profit grew by 9. 58 percent year-on-year in 2023 with OP margin slightly inching down to 10. 6 percent. Other expense shed 35. 23 percent in 2023 due to lower provisioning as well as no exchange loss incurred during the year. Finance cost multiplied by a whopping 76 percent year-on-year in 2023 due to monetary tightening. This was despite the fact that the company paid off a huge portion of its liabilities during the year which is evident from its gearing ratio considerably falling down to 23 percent in 2023 from 53 percent in 2022 (see the graph of gearing ratio & finance cost). NRSL posted 5. 18 percent year-on-year rise in its net profit in 2023 which clocked in at Rs. 385. 88 million with EPS of Rs. 2. 73 and NP margin of 4. 12 percent. NRSL posted 8. 39 percent decline in its net sales which were recorded at Rs. 8584. 74 million in 2024. This was due to lower market demand. The company increased its rated capacity from 45, 600 MT in 2023 to 46, 560 MT in 2024. However, the company was able to utilize 51. 96 percent of its capacity as against 57. 42 percent capacity utilization attained in the previous year. Cost of sales dropped by 9. 11 percent in 2024, resulting in 3. 51 percent shrinkage recorded in gross profit. Conversely, GP margin attained its highest level of 13. 57 percent in 2024. Distribution expense mounted by 17. 34 percent in 2024 due to higher salaries expense as well as packing, carriage & forwarding charges incurred during the year. Administrative expense spiked by 42. 89 percent in 2024 on account of higher payroll expense as well as fee & subscription charges incurred during the year. The company squeezed its workforce from 135 employees in 2023 to 131 employees in 2024. High fee & subscription charges incurred during the year, was the result of a scheme of arrangement entered into by the company during the year. Under this scheme, the company’s shareholding was exchanged among owners/sponsors. As a result, Nimir Management (Private) Limited and Nimir Industrial Chemicals Limited are no longer the parent company and the ultimate parent company of NRSL respectively. NRSL’s operating profit dipped by 10. 57 percent in 2024 with its OP margin ticking down to 10. 34 percent. Other expense dropped by 25. 48 percent in 2024 due to lower provisioning booked for ECL and WPPF. Finance cost grew by 18. 27 percent in 2024 due to increased short-term borrowings obtained during the year. This drove the gearing ratio up to 36. 46 percent in 2024 from 22. 62 percent in 2023. Other income enlarged by 43. 72 percent in 2024 due to hefty foreign exchange gain and gain on sale of fixed assets recognized during the year. NRSL’s bottomline slumped by 29. 93 percent in 2024 to clock in at Rs. 270. 38 million with EPS of Rs. 1. 91 and NP margin of 3. 15 percent. In 2025, NRSL’s topline ticked up by 7. 85 percent to clock in at Rs. 9258. 81 million. This was due to a rebound in the economic activity on account of improved macroeconomic indicators. During the year, the company sold off its majority shareholding to Rudolf Pakistan Private Limited, a subsidiary of Rudolf GmbH, a legacy German chemical business. This arrangement helped both the companies compliment each others’ product ranges which helped increase sales. The collaboration also provided R&D enrichment, technology transfer as well as domestic and international expansion to NRSL. The company produced 27, 383 metric tons of output in 2025, up 13. 17 percent year-on-year. This translated into capacity utilization of 58. 81 percent in 2025 versus 51. 97 percent in 2024. Cost of sales mounted by 12. 18 percent in 2025 due to fluctuations in the international commodity prices coupled with elevated energy tariff. This squeezed the gross profit by 19. 74 percent in 2025 with GP margin falling down to 10. 10 percent. Distribution expense ticked up by 2 percent in 2025 on account of improvement in sales volume which pushed up packing, carriage & forwarding charges. Conversely, administrative expense International Literacy Day inched down by 6. 31 percent in 2025 on the back of streamlining of workforce and lower fee & subscription charges as well as legal & professional charges. The company incurred high fee & subscription charges as well as legal charges in 2024 due to a scheme of arrangement explained above. Operating profit weakened by 25. 22 percent in 2025 with OP margin slipping to7. 17 percent. Increase in profit related provisioning as well as provisioning done for ECL and obsolete stock was the cause of 83. 52 percent higher other expense incurred in 2025. Foreign exchange loss of Rs. 3. 79 million incurred in 2025 also inflated other expense during the year. Other income strengthened by 100. 31 percent in 2025 due to excess liabilities written back and gain recognized on the disposal of fixed assets. Finance cost dropped by 27 percent in 2025 due to monetary easing. NRSL’s bottomline tumbled by 7. 73 percent to clock in at Rs. 249. 47 million in 2025. This translated into EPS of Rs. 1. 77 and NP margin of 2. 69 percent in 2025. Recent Performance (9MFY26) During the nine-month period of the ongoing fiscal year, NRSL registered a massive 29. 24 percent enhancement in its net sales which clocked in at Rs. 9084. 72 million. This was due to improved sales volume across business segments – coating, emulsion & blending, textile, papers & others. Higher sales volume, price optimization, dynamic sales mix and cost efficiency enabled MRSL to record 30. 71 percent enhancement in gross profit in 9MFY26 with GP margin clocking in at 11. 14 percent slightly above the GP margin of 11 percent recorded in 9MFY25. Higher sales volume pushed up distribution expense by 24. 90 percent in 9MFY26. Administrative expense also surged by 37. 63 percent in 9MFY26 due to enhancement of the company’s operations which would have required additional human resources. Inflationary pressure also played a role in driving up administrative expense during the period under review. NRSL registered 30. 49 percent growth in its operating profit in 9MFY26 with OP margin staying intact at 8 percent. Other expense ticked up by 3. 78 percent in 9MFY26 likely due to higher provisioning done for WWF and WPPF which was greatly offset by no exchange loss recorded during the period. Other income rebounded by 109. 31 percent in 9MFY26 due to exchange gain and gain on disposal of fixed assets. Monetary easing for the major part of 9MFY26 resulted in 18 percent decline in finance cost in 9MFY26 despite increased working capital related borrowings. The recent decision by the Supreme Judicial Council required NRSL to pay an additional super tax worth Rs. 64 million to the government. This considerably slashed its net profit which nevertheless increased by 23. 61 percent to clock in at Rs. 242. 26 million in 9MFY26. This translated into EPS of Rs. 1. 71 and NP margin of 2. 67 percent in 9MFY26 versus EPS of Rs. 1. 39 and NP margin of 2. 79 percent registered in 9MFY25. Future Outlook NRSL’s diversified product portfolio and cost competitiveness is expected to keep its financial performance buoyant. However, the recent Middle East crisis has disrupted the global commodity market particularly petrochemicals. This will take its toll on the cost of NRSL which might reduce its demand and squeeze its margins.

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