By BR Research

Copyright brecorder

Ismail Industries Limited (PSX: ISIL) was incorporated in Pakistan as a private limited company in 1988 and was converted into a public limited company in 1989. The company is engaged in the manufacturing and trading of sugar, confectionary items, biscuits, potato chips, cast polypropylene (CPP) and Biaxially oriented polyethylene terephthalate (BOPET) film under the brands of Candyland, Bisconni, Snackcity and Astro films respectively.

Pattern of Shareholding

As of June 30, 2025, ISIL has 66.357 million outstanding shares held by 1590 shareholders. Directors, CEO, their spouse and minor children have the majority stake of 98.96 percent in the company. The remaining 1.04 percent shares are divided among associated company (Uniron Industries Private Limited), local general public, foreign general public, foreign companies and other categories of shareholders.

Financial Performance (2019-24)

ISIL’s topline has shown consistent growth over the period under consideration except for a decline in 2025. In contrast, the bottomline faced challenges in 2019 and 2020. However, it demonstrated a remarkable rebound thereafter until 2023. In 2024 and 2025, ISIL’s bottomline descended. ISIL’s margins displayed a fluctuating pattern (see graph of profitability ratios). Up until 2020, margins experienced a decline. In 2021, operating and net margins showed signs of recovery, albeit with a continued decrease in gross margin. In 2022, gross and net margins declined, while operating margin witnessed substantial growth. ISIL’s margins followed an uphill journey in 2023 and 2024 barring a decline in net margin in 2024. In 2025, all the margins posted a plunge. A detailed performance review of the period under consideration is given below.

In 2019, ISIL’s topline posted a significant year-on-year growth of 25.87 percent to clock in at Rs.30,090.89 million. This came on the back of 14 percent year-on-year rise in food sales and 31 percent year-on-year rise in plastic sales during the year. The company witnessed buoyancy in both local and export sales in 2019. ISIL had a plastic film manufacturing capacity of 33,000 MT and it utilized 76.35 percent of its capacity in 2019 versus 80.98 percent capacity utilization recorded in 2018. In 2019, ISIL enhanced its food processing capacity from 115,350 MT to 125,335 MT owing to 13 new brand launches during the year. This resulted in a capacity utilization of 71 percent in 2019. Unparalleled inflation, spike in the cost of raw materials, Pak Rupee depreciation as well as elevated energy cost pushed cost of sales up by 28 percent year-on-year in 2019. Gross profit grew by 18.52 percent year-on-year in 2019, however, GP margin inched down from 22.43 percent in 2018 to 21.12 percent in 2019. Selling & distribution expense escalated by 23.95 percent year-on-year in 2019 which was the product of high payroll, advertising and freight expense. ISIL hired 94 new employees during the year which drove up the headcount to 2336 in 2019. This resulted in 41.87 percent higher administrative cost incurred during the year. ISIL recorded net other income of Rs.40.34 million in 2019 as against the net other expense of Rs.21.35 million in 2018. This was on account of lower provisioning for WWF, WPPF as well as lower exchange loss. Operating profit improved by 9.75 percent year-on-year in 2019, however, OP margin tapered to 7.52 percent in 2019 from 8.63 percent in 2018. Finance cost surged by 46.59 percent year-on-year in 2019 due to monetary tightening coupled with increased borrowings obtained during the year (see the graph of gearing ratio and finance cost). The company’s share of profit from associated companies (which comprise of investments in Bank of Khyber and Novelty Enterprises (Private) Limited) also significantly plummeted by 88.46 percent year-on-year in 2019. This squeezed the net profit by 31.55 percent year-on-year in 2019 to clock in at Rs.966.60 million. NP margin declined from 5.91 percent in 2018 to 3.21 percent in 2019. EPS also shrank from Rs. 22.13 in 2018 to Rs.15.15 in 2019.

ISIL’s net sales grew with a lower magnitude of 10.30 percent year-on-year to clock in at Rs.33,218.27 million in 2020. While food sales grew by 24 percent year-on-year in 2020, plastic packaging sales ticked up by just 1 percent year-on-year. This was on account of COVID-19 associated protocols which led to shut-down of many industries resulting in reduced demand for plastic packaging. Food sales constituted 79 percent of ISIL’s net sales in 2020 versus 76 percent in 2019. The robust performance of food business was also driven by new product launches during the year which included Cocomo Strawberry, Rite Vanilla, Chai wala Biskut etc. Region-wise breakup of sales reveal that local sales posted a marginal 2 percent year-on-year growth in 2020 while export sales posted a staggering 148 percent year-on-year growth during the year. As of 2020, local sales accounted for 86 percent of the net sales of the company versus its share of 94 percent during the last two years. During 2020, the company enhanced its food processing capacity by 32,127 MT leading to the annualized capacity of 162,462 MT. Capacity utilization stood at 60.5 percent for the food segment and 75.22 percent for the plastic segment. Cost of sales spiked by 10.97 percent year-on-year in 2020 due to supply chain disruptions owing to COVID-19 coupled with Pak Rupee depreciation, unprecedented food inflation and high energy cost. This further compressed the GP margin to 20.70 percent in 2020 while gross profit in absolute terms grew by 8.24 percent year-on-year. Selling and administrative expense grew by 24.49 percent and 9.84 percent respectively in 2020. This was on account of increased advertising budget, carriage outward as well as payroll expense incurred during the year. In 2020, ISIL streamlined its workforce to 2316 employees. ISIL posted net other income of Rs.171.84 million in 2020, 326 percent higher than last year. This was the result of exchange gain as well as sale of scrap made in 2020. Operating profit slid by 12.25 percent year-on-year in 2020 with OP moving measuring down to 6.18 percent. Finance cost spiraled by 27.62 percent year-on-year in 2020 on account of higher borrowings particularly long-term loans to finance CAPEX. During 2020, ISIL’s share of profit from associated companies magnified by a massive 984 percent. This was dominated by profit received from Bank of Khyber. Hefty share of profit from associated companies couldn’t help bottomline which slipped by 3.58 percent year-on-year in 2020 to clock in at Rs.931.97 million with NP margin of 2.81 percent and EPS of Rs.14.49, the lowest during the period under consideration.

ISIL’s topline grew by 12.31 percent year-on-year in 2021 to clock in at Rs.37,307.76 million. This was contributed by 10 percent year-on-year growth in food sales and 20 percent year-on-year growth in plastic sales. Topline growth was the consequence of increased off-take, upward price revisions as well as change in product mix. Region-wise breakup of sales show that local sales marched up by 7 percent year-on-year in 2021 while export sales posted a tremendous 49 percent year-on-year growth, occupying 18 percent of ISIL’s net sales pie in 2021 versus 14 percent in 2020. The company added 4100 MT to the annual capacity of food segment in 2021 and utilized 53 percent of the total capacity. The capacity of plastic segment also escalated to 63000 MT out of which 47 percent was utilized in 2021. Cost of sales grew by 14.33 percent year-on-year in 2021. Gross profit ticked up by 4.60 percent year-on-year, however, GP margin slid to 19.28 percent in 2021. Selling expense went down by 5.23 percent year-on-year in 2021 on account of lesser advertisement and sales promotion budget allocated for the year. Administrative expense registered 9.80 percent year-on-year hike in 2021 on account of higher payroll expense. In 2021, ISIL posted net other expense of Rs.0.91 million which was the result of massive exchange loss incurred during the year coupled with higher provisioning for WWF and WPPF. These expenses overshadowed the massive gain that ISIL recognized on the disposal of its fixed assets in 2021. Nevertheless, operating profit managed to post 16.10 percent year-on-year rebound in 2021 with slight recovery in OP margin which stood at 6.18 percent. Finance cost gave a breather as it measured down by 39.98 percent year-on-year in 2021 on account of monetary easing and considerably lesser borrowings obtained during the year. Share of profit from associated companies also contributed to bottomline growth as it grew by 22.26 percent year-on-year in 2021. Net profit rose by 90.64 percent year-on-year to clock in at Rs.1776.67 million in 2021 with NP margin jumping up to 4.76 percent. EPS also grew to Rs.26.77 in 2021.

ISIL’s topline registered 48.12 percent year-on-year growth in 2022 to clock in at Rs.55,260.70 million. This was on account of 45 percent higher food sales and 60 percent higher plastic sales. Locally, net sales posted 31 percent rebound in 2022. Export sales grew by 126 percent, constituting 27 percent of the net sales of ISIL in 2022. Food segment capacity grew to 183,288 MT in 2022 out of which 55 percent was utilized. Capacity utilization of plastic segment stood at 63.4 percent in 2022. High inflation, Pak Rupee depreciation, hikes in electricity tariff and global commodity super cycle translated into 50.81 percent higher costs of sales in 2022. Gross profit grew by 36.86 percent year-on-year in 2022; however, GP continued to march down and was recorded at 17.82 percent in 2022. Distribution expense grew by 12.97 percent in 2022. This was on account of higher sales volume and hike in POL prices which pushed up freight charges. Higher export charges also pushed the distribution expense up in 2022. Increase in the number of employees from 2324 in 2021 to 2643 in 2022 drove the administrative expense up by 25.26 percent in 2022. ISIL posted net other income of Rs. 340.06 million in 2022 primarily due to massive exchange gain earned on export sales coupled with gain on sale of fixed assets as well as sale of scrap. Operating profit picked up by 98.85 percent year-on-year in 2022 with OP margin climbing up to 8.30 percent. Finance cost elevated by 103.83 percent year-on-year in 2022 due to multiple rounds of monetary tightening during the year and increased borrowings. Share of profit from associated companies posted a downtick of 64 percent in 2022. Furthermore, higher effective tax rate also played its role in diluting the bottomline growth in 2022. Net profit grew by 43.58 percent year-on-year in 2022 to clock in at Rs.2551.02 million with NP margin of 4.62 percent and EPS of Rs.38.44.

In 2023, the company attained an unsurpassed topline growth of 60.88 percent year-on-year to clock in at Rs.88,905.80 million. This came on the back of increased sales off-take, upward price revision to account for cost hike and also enhanced focus on export sales which rendered tremendous results amid Pak Rupee depreciation. Food sales grew by 76 percent in 2023; however, plastic sales posted 12 percent growth during the year. As of 2023, food sales constituted 83 percent of ISIL’s net sales mix. In accordance with the growing demand, the company enhanced its food processing capacity by 36,644 MT to 219,932 MT in 2023 and utilized 56 percent capacity. The capacity utilization of plastic segment ticked down to 54.16 percent in 2023. Region-wide sales data shows 22 percent year-on-year growth in local sales and a staggering 163 percent year-on-year growth in export sales. Export sales made up 45 percent of ISIL’s sales mix in 2023. The company successfully passed on the impact of cost spike to its consumers which resulted in 87.21 percent higher gross profit and an improved GP margin of 20.73 percent in 2023. Selling and administrative expense enlarged by 47.42 percent and 28.38 percent respectively on account of higher sales and production volumes, capacity enhancements, addition of flour mill to its business portfolio and also because of higher ocean freight charges due to hike in the prices of POL products. Higher export expense was also one of the reasons of elevated distribution expense owing to company’s inclination towards export sales. ISIL also greatly enhanced its advertising & promotion budget in 2023. In 2023, ISIL expanded its workforce by 410 employees to take it to 3053 employees. Tremendous net other income of Rs.1172.57 million recorded by ISIL in 2023 was primarily the result of hefty exchange gain recognized on account of export sales. Operating profit rebounded by 150.91 percent year-on-year in 2023 with OP margin jumping up to 12.94 percent. Finance cost grew by 211.14 percent year-on-year in 2023 on account of higher cost of borrowing and increased amount of external loans to finance CAPEX and working capital requirements. 97.65 percent rise in share of profit from associated companies also buttressed the bottomline which grew by 150.16 percent year-on-year in 2023 to clock in at Rs.6381.68 million with NP margin of 7.18 percent and EPS of Rs.96.17.

ISIL’s topline registered 22.47 percent year-on-year growth to clock in at Rs. 108,887.02 million in 2024. Local sales registered 49 percent growth while export sales posted 22 percent growth in 2024. Export sales constituted 40 percent of the company’s net sales mix versus 45 percent in the previous year. Category-wise sales show 40 percent growth in food segment and 19 percent growth in plastic segment in 2024. During the year, the company enhanced the capacity of its food processing segment to 298,356 metric tons and utilized 64.56 percent of its capacity. Capacity utilization of plastic segment was recorded at 56.48 percent in 2024. Changes in sales mix, higher sales volume, focus on export markets and upward price revision allowed ISIL to record 30.33 percent growth in its gross profit in 2024 with GP margin jumping up to 22.10 percent. Selling & distribution expense escalated by 17.41 percent in 2024 on the back of higher salaries, carriage outward, export expense and advertisement & promotion expense incurred during the year. Inflationary pressure culminated into 67.88 percent higher administrative expense in 2024 despite streamlining of workforce from 3053 in 2023 to 2923 in 2024. Net other income slid by 61.30 percent in 2024 due to considerably lower exchange gain as Pak Rupee started showing signs of resilience during the year. Operating profit strengthened by 25.48 percent in 2024 with OP margin attaining its highest level of 13.26 percent. Finance cost mounted by 67.84 percent in 2024 due to higher discount rate. Share of profit from associated companies rose by 46.35 percent in 2024. This particularly comprised of dividend received from Bank of Khyber. ISIL’s net profit dipped by 3.91 percent in 2024 to clock in at Rs.6132.049 million with EPS of Rs.92.41 and NP margin of 5.63 percent.

In 2025, ISIL’s net sales plummeted by 3.39 percent to clock in at Rs.105,192.60 million. This came on the back of 4 percent downtick recorded in food sales in 2025. This was on account of decline in the purchasing power of consumers due to prolonged period of high inflation. Conversely, plastic sales ticked up by 3 percent in 2025 due to resurgence in the industrial activity. Region-wise break-up of sales show that while local sales posted 13 percent growth in 2025, export sales deteriorated by 26 percent. Decline in export sales was on the back of higher international tariffs, lackluster consumer demand and increased competition in food exports business. Stability in the value of Pak Rupee also squeezed the value of export sales in Rupee terms. As of June 30, 2025, export sales constituted 30 percent of ISIL’s net sales versus its share of 40 percent in the previous year. In 2025, the company enhanced its food processing capacity by 18,060 metric tons to 316,416 metric tons. Capacity utilization of food processing segment clocked in at 63.77 percent in 2025. Plastic segment registered capacity utilization of 57.83 percent in 2025. Higher cost of sales on the back of elevated energy tariff resulted in 9.11 percent decline in gross profit in 2025. GP margin also fell to 20.76 percent in 2025. Selling & distribution expense grew by 10.54 percent in 2025 due to increase in the salaries of sales force, elevated advertisement & promotion budget and higher export expenses incurred during the year. Administrative expense inched up by 5.45 percent in 2025 due to higher travelling & conveyance charges as well as fee & subscription charges incurred during the year. Net other income ticked up by 2 percent in 2025 due to lesser profit related provisioning and higher income from short-term investments. ISIL recorded 21.81 percent decline in its operating profit in 2025 with OP margin ticking down to 10.73 percent. Finance cost tapered off by 31.65 percent in 2025 due to monetary easing. Conversely, outstanding borrowings increased during the year. Share of profit from Bank of Khyber (an associated company) posted 142 percent growth in 2025. ISIL’s net profit declined by 6.24 percent to clock in at Rs.5749.49 million in 2025. This translated into EPS of Rs.86.64 and NP margin of 5.47 percent in 2025.

Future Outlook

Cognizant of ongoing political and economic challenges in the local and international markets, ISIL will continue to rely on its strategy of cost optimization, product diversification, and increased focus on export sales to deliver impressive financial results. In 2024, the company set up a wholly owned subsidiary in Abu Dhabi, UAE. This will further enhance the geographical footprint of ISIL by providing access to Middle East, Europe, Asian and African markets while keeping a check on its export expense and freight charges.