Aruj Industries Limited

Aruj Industries Limited (PSX: ARUJ) is a public limited company established in 1992. The principal activity of the company is the manufacturing and sale of fusible interlining as well as dying, bleaching and stitching of fabric. Pattern of Shareholding As of June 30, 2025, ARUJ has a total of 10. 458 million shares outstanding which are held by 947 shareholders. Directors, CEO, their spouse and minor children have the majority stake of 66. 25 percent in the company followed by local general public holding 32. 63 percent shares of ARUJ. Joint stock companies account for 1. 06 percent shares of ARUJ. The remaining shares are held by other categories of shareholders. Financial Performance (2021-25) Over the period under consideration, ARUJ’s topline and bottomline registered growth only in 2021. Its bottomline started registering net losses since 2022. ARUJ’s margins portray an asymmetrical pattern over the period under consideration. In 2020, gross and operating margins picked up while net margin shrank. This was followed by contraction in gross and operating margins and a paltry upward movement in net margin in 2021. In the subsequent years, the margins drastically fell. The detailed performance review of the period under consideration is given below. In 2021, ARUJ posted 18. 80 percent rise in its topline which clocked in at Rs. 1391. 63 million. This was because the company regained its orders which were cancelled in 2020 due to lockdown and shortage of raw materials. Pak Rupee depreciation also increased the value of the company’s export sales, however, high inflation, hike in the cost of imported chemical and dyes as well as heightened energy tariff pushed down gross profit by 5. 82 percent in 2021 with GP margin plunging to 10. 14 percent from 12. 79 percent in 2020. Distribution expense shrank by 16. 69 percent in 2021 due to lower export expenses incurred during the year. Conversely, administrative expense swelled by 2. 87 percent year-on-year in 2021 on the back of higher payroll expense as well as vehicle running & maintenance charges incurred during the year. 50 percent higher other expense incurred during the year was the consequence of increased profit related provisioning. Conversely, lower exchange gain as well as no gain recorded on the disposal of fixed assets during the year drove down other income by 77. 14 percent in 2021. This resulted in 10. 90 percent lower operating profit recorded by ARUJ in 2021 with OP margin sliding down to 5. 02 percent from 6. 70 percent in 2020. 36. 34 percent lower finance cost due to monetary easing rescued ARUJ’s bottomline from contraction. ARUJ’s bottomline grew by 26. 85 percent year-on-year in 2021 to clock in at Rs. 13. 33 million with EPS of Rs. 1. 27 and NP margin of 0. 96 percent. This was against the EPS of Rs. 1 and NP margin of 0. 90 percent recorded in 2020. ARUJ witnessed 6. 68 percent thinner net sales to the tune of Rs. 1298. 73 million in 2022. While processing and coating sales tremendously grew during the year, it was offset by lower local and export sales owing to dampened demand. Pak Rupee depreciation, elevated prices of gas and coal as well as imported chemical and dyes together with high indigenous inflation took its toll on ARUJ’s gross profit which declined by 39 percent in 2022. Considerably lower export expenses due to lackluster export volumes pushed down distribution expense by 52. 31 percent in 2022. Administrative expense also plunged by 8. 50 percent in 2022 due to lower vehicle running & maintenance charges as well as postage & telegram charges. ARUJ also squeezed its workforce from 304 employees in 2021 to 269 employees in 2022; however, adjustment of minimum wage rate didn’t allow payroll expense to lessen. ARUJ didn’t book any profit related provisioning during the year, resulting in 82. 53 percent lower other expense. However, it booked exchange loss worth Rs. 0. 448 million in 2022. The company also registered 750. 41 percent higher other income in 2022 by recording a gain on sale of its fixed assets. Operating profit eroded by 40 percent in 2022 with OP margin slipping to 3. 22 percent. Finance cost surged by 31. 62 percent in 2022 owing to heightened discount rate and increased short-term borrowings on account of tighter liquidity position amid elevated cost of sales. Gearing ratio magnified from 56. 88 percent in 2021 to 63. 89 percent in 2022. ARUJ posted net loss of Rs. 20. 79 million in 2022 with loss per share of Rs. 1. 99. ARUJ recorded a drastic drop of 33. 94 percent in its topline which clocked in at Rs. 858 million in 2023. This was due to sluggish demand in both local and export markets owing to high inflation which squeezed the purchasing power of customers. High cost of sales owing to Pak Rupee depreciation, global commodity super cycle, elevated energy tariff and high inflation resulted in gross loss of Rs. 60. 87 million in 2023. Distribution expense contracted by 91. 38 percent in 2023 owing to shrunken export expense as export sales volume considerably declined during the year. Administrative expense inched up by 6. 59 percent in 2023 due to increased depreciation charge and other miscellaneous expenses incurred during the year. Exchange loss of Rs. 1. 972 million resulted in 340. 18 percent spike in other expense in 2023. ARUJ didn’t record any other income during the year. This resulted in operating loss of Rs. 105. 42 million in 2023. Finance cost diminished by 40. 91 percent in 2023. During the year, ARUJ’s current liabilities exceed its current assets by Rs. 101. 056 million with majority of its loans not being rescheduled. This cast doubts over the company’s ability to continue as a going concern. In 2023, the company’s gearing ratio surged to its highest level of 72. 35 percent due to increased borrowings as well as lower equity on account of accumulated losses. ARUJ recorded net loss of Rs. 139. 545 million in 2023 with loss per share of Rs. 13. 34. Over the years, ARUJ’s sales have been diminishing which is evident in 58. 24 percent decline in topline in 2024 followed by 99. 95 percent plunge in topline in 2025. In 2024, the company’s net sales clocked in at Rs. 358. 28 million which comprised of only local retail sales as well as processing & coating sales. In 2025, ARUJ recorded the lowest ever net sales of Rs. 0. 19 million. While export sales continued to remain halted in 2025, local sales also slid owing to no processing and coating revenue recognized during the year. Due to liquidity crunch and lack of working capital financing, the company was not able to take any export orders. Processing income also stalled in 2025 due to poor macroeconomic conditions which squeezed the demand. The company continued to incur hefty cost of sales in both the years due to higher inflation, elevated energy tariff and lower absorption of fixed cost. ARUJ recorded gross loss of Rs. 248. 20 million, up 307. 74 percent year-on-year in 2024. This was followed by gross loss of Rs. 25. 43 million, down 89. 76 percent year-on-year in 2025. No distribution expense was incurred in both the years. Administrative expense surged by 48 percent in 2024 due to refundable sales tax written off. In 2025 administrative expense plummeted by 84. 42 percent primarily due to high-base effect of dismissal of sales tax in the previous year. Furthermore, no directors’ remuneration was recorded in 2025. Payroll expense also drastically fell in 2025. ARUJ streamlined its workforce from 183 employees in 2023 to 79 employees in 2024 and then to only 3 employees in 2025. No other expense and other income were recorded in both the years. Operating loss clocked in at Rs. 309. 59 million, up 193. 66 percent year-on-year in 2024. This was followed by 88. 70 percent slide in operating loss which clocked in at Rs. 34. 99 million in 2025. Finance cost also shrank in 2024 and 2025. The company was not able to pay off its outstanding debt and accrued mark-up due to sustained net losses, negative equity and current liabilities greater than current assets. Net loss mounted by 141. 36 percent to clock in at Rs. 336. 811 million in 2024 with loss per share of Rs. 32. 21. This was followed by 88 percent lower net loss to the tune of Rs. 40. 416 million and loss per share of Rs. 3. 86 in 2025. Recent Performance (9MFY26) ARUJ’s sales which had been drastically falling over the past few years completely halted in 2026 as evident by the nine-monthly report of the company. This was against the sales of 0. 19 million posted by the company in 9MFY25. It is to be noted that throughout 2025, the company only recorded sales in the first quarter. The company has put its operations on hold on account of sustained losses and its inability to pay off its outstanding liabilities which rendered it unable to obtain any fresh financing lines. Gross loss clocked in at Rs. 16. 182 million in 9MFY26, down 23. 64 percent year-on-year. No distribution expense was incurred during the period. Administrative expense also fell by 28 percent in 9MFY26 due to curtailed operations and rationalization of workforce. Operating loss clocked in at Rs. 21. 86 million in 9MFY26, down 24. 83 percent year-on-year. No finance cost was incurred during the period under review versus finance cost of Rs. 1. 31 million incurred in 9MFY26. Net loss was recorded at Rs. 21. 86 million in 9MFY26, down 28 percent year-on-year. This translated into loss per share of Rs. 2. 09 in 9MFY26 versus loss per share of Rs. 2. 91 recorded in 9MFY25. Future Outlook With its current liabilities exceeding its current assets by 412. 96 million as of March 31, 2026 and accumulated loss clocking in at Rs. 437. 93 million, there are significant doubts over the company’s ability to continue as a going concern. The founder of the company, Mr. Maqsood Ahmed Butt had decided to inject cash into the company during FY26 to resolve its financial constraints, however, due to geopolitical tensions, the cash injection has been delayed until the first quarter of FY27.

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