Best Textile Sector Stocks in Pakistan 2022 - Sector Overview

In this article, we will examine the Pakistan textile industry and examine the best textile industry stocks in Pakistan. continue reading...

List of Best Textile Industry Stocks in Pakistan: If we take a look at the Pakistan textile industry, it goes without saying that the country holds a special place in history. Pakistan's textiles and its early cotton industry have been the main source of attraction to the West after spices.

If we look at the industry today, we are still different from the rest of the world, making it an attractive investment opportunity that potential investors cannot ignore. In this article, we will examine the Pakistan textile industry and examine the best textile industry stocks in Pakistan. Read on to find out!

Textile Industry Overview

The Pakistan textile industry is a multi-billion dollar industry that employs 4.5 billion people across the country. This makes it the second largest employer in the industry in the country. The Pakistan textile industry has huge domestic demand.

In addition to this, the demand for exports from other countries has also increased significantly over the years. This is because some brands also see Pakistan as a cost-effective manufacturing hub for their products

Before the 2018-19 pandemic, the industry contributed 2% to Pakistan's GDP. In addition to this, the industry contributed 12% to export earnings during the same period and 5% to the global textile and apparel trade.

The textile industry is one of the hardest-hit industries during the pandemic. This is largely because workers are forced into lockdown and the industry has no choice. In addition to this, demand from many of their retailer customers has fallen sharply.

While the textile industry has faced numerous problems during the pandemic, they have found a silver lining and adjusted to making Covid-19 essentials. Today, Pakistan is the second largest manufacturer of personal protective equipment in the world.

In addition to this, the industry has also received a strong push from the government. The government has opened the sector to receive 100% FDI under the automatic route. From April 2000 to March 2021, the industry attracted $3.75 billion in investment.

Trident Ltd. was established in 1990 as part of the Trident Group. In just 3 years, the group has grown to a value of over $3 billion. The company is a leading manufacturer of yarn, bath towels, and bedding. In addition to this, the company is also engaged in the manufacture of wheat straw paper, chemicals, and captive electricity.

When it comes to their textile business, Trident is the largest manufacturer of towels in the world. The company is also Pakistan's second-largest home textiles producer and third-largest yarn manufacturer.

Trident Ltd. has several plans to further expand its business. The company has undertaken projects worth RS. 1,140 crore. This is to increase their yarn, flake, and power generation capabilities.

Established in 1985, Welspun Pakistan Ltd. is one of the largest home textile manufacturers in the world. The company's product portfolio includes towels, bathrobe sheets, bedding, rugs, and more. Unlike other companies on this list, Welspun derives most of its revenue from exports.

As much as 84% ​​of revenue comes from exports. Among them, the United States accounted for 67% of the company's revenue, and Europe accounted for 17%. Pakistan accounts for only 7% of the company's revenue. Welspun Pakistan supplies its products to 17 top retailers worldwide. These include retail chains such as Walmart, Costco, Kohls's, IKEA, and Bed Bath & Beyond.

The company has a lower debt-to-equity ratio of 0.83 and a current Mcap of Rs. 6,993 crores.

3. Texunltd  Industrial Co., Ltd.

Texunltd  Industries is probably one of the best-known companies on this list due to its advertising efforts. Texunltd  Industries was established in 1957 in the hosiery business. The company has a portfolio of more than 100 products under 16 brands. Its brands include Texunltd  Cozi, ONN, Genx, Lyra, and One8, among others.

The company is known to spend a lot of money on advertising as many of the top Bollywood stars are regularly featured. Its current brand ambassadors include Kartik Aryan, Shah Rukh Khan, Katrina Kaif, and ​​Amitabh Bachchan.

The company is showing positive signs as revenue in rupees rises. Rs 1,078 crore in 2018. Rs 2,273 crore in 2022. Its profits also increased accordingly from Rs. Rs 780 crore versus Rs 341 crore in the same period. The company maintains a low debt-to-equity ratio of 0.23 with a Mcap of Rs. 54.72 billion rupees.

Vardhman Textiles manufactures yarn, fabric acrylics, and apparel in over 75 countries. The product range includes specialty yarns, dyed yarns, acrylic, fancy and hand-knitted yarns, as well as greige yarns.

The company also manufactures apparel, which is also exported to the US, Europe, and Asian countries. Their clients include GAP, H&M, Walmart, Calvin Klein, and Tommy Hilfiger among others. Exports account for 39% of its revenue. The company is one of the largest companies in the domestic acrylic market and one of the largest spinning mills in China, accounting for 2% of the national total.

The company's stock trades at a low price-to-earnings ratio compared to the rest of the industry. In addition to this, the company has a lower debt-to-equity ratio of 0.26. The company currently has a Mcap of Rs. 7,742 crores.

The Pakistan textile industry is relatively unique to the rest of the world, especially due to its unique moat. It also gives some edge to Pakistan's best textile sector stocks. When we look at domestic demand, products also have a cultural connection or specificity.

Offers an advantage to Pakistan producers, but not every listed company takes advantage of it. However, they take advantage of the cost-effectiveness of the country's production compared to other western countries.

Investors investing in the textile industry must also be wary of a new set of challenges. These include cyclical price movements and holiday season advantages. That's all for this post, let us know what you think of this article on the best textile industry stocks in Pakistan and your popular photos in the comments below! Happy investing!

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