Shadab Textiles Mills

Years 2015 2016

Sales 1,852.80 1,861.58
Growth Percentage 0.47%
es Mills

2017 2018 2019 2020 Avg: Growth

2,042.32 2,271.53 2,813.43 2,290.54
9.71% 11.22% 23.86% -18.59% 5%
 Shahdad Textile Mills
Forcasted Income Statement
FOR THE YEAR ENDED JUNE 30

In Millions of PKR except Per Share FY 2020 FY 2021 FY 2022

12 Months Ending
Net Sales 2,290,540.00 2,412,747.26 2,541,474.66
- Cost of Sales 2160400 2,275,663.90 2,397,077.48
Gross Profit 130140 137,083.36 144,397.18
+ Administratives and generali expenseso 73267 73267 73267
- Selling and distributions expense 5470 5,761.84 6,069.25
78737 79028.8 79336.3
OPERATING PROFIT 51,403.00 54,145.51 57,034.33
Finance costs 10644 11,211.89 11,810.08
Other charges 4975 5,240.43 5,520.02
35,784.00 37,693.2 39,704.2
Other income 27552 29,022.0 30,570.4
Pretax Income, Adjusted 63,336.00 66,715.2 70,274.6
Taxation(31%) 19,634.16 20,681.7 21,785.1
Profit After Tax 43,701.84 46,033.5 48,489.5
 growth rate 5%
ent (1+g) 105%
UNE 30
Tax 31%
FY 2023 FY 2024 FY 2025

2,677,070.05 2,819,899.87 2,970,350.09

2,524,968.84 2,659,683.60 2,801,585.80
152,101.21 160,216.27 168,764.29
73267 73267 73267
6,393.07 6,734.16 7,093.44
79660.1 80001.2 80360.4
60,077.29 63,282.59 66,658.91
12,440.18 13,103.90 13,803.04
5,814.53 6,124.76 6,451.53
41,822.6 44,053.9 46,404.3
32,201.4 33,919.5 35,729.2
74,024.0 77,973.4 82,133.5
22,947.4 24,171.8 25,461.4
51,076.6 53,801.6 56,672.1
 Shadad Textile Mills
Forcasted Balance Sheet

In Millions of PKR except Per Share FY 2020 FY 2021 FY 2022

12 Months Ending
Non-Current Assets
+ Property, plant and equipment 374,019 374,019 374,019
+ Right of use asset 14,993 14,993 14,993
+ Long term deposits 2,434 2,434 2,434
Current Assets 391,446.0 391,446.0 391,446.0
+ Short term Investments 236,000 248591.32 261854.42
+ Stores, spares and loose tools 64,430 67867.54 71488.48
+ Stock in trade 224,545 236525.16 249144.49
+ Trade debts 116,616 122837.82 129391.59
+ Loans and advances 11,113 11705.91 12330.46
+ Trade deposits and prepayments 72,450 76315.43 80387.09
+ Other receivables 8,060 8490.03 8942.99
+ Cash and bank balances 251,798 265232.19 279383.13
Total Noncurrent Assets 985,012.0 1,037,565.4 1,092,922.6
Total Assets 1,376,458 1,429,011 1,484,369

Liabilities & Shareholders' Equity

+ Trade and other payables 248,737 262008 275987
+ Unclaimed dividend 654 654 654
+ Accrued mark-up 775 816 860
+ Line of Credit 34198 13386 27486
+ Sponsors loan 160,600 160600 160600
+ Short term borrowings 37,478 37478 37478
+ Current portion of long term liabilities 5091.00 5091 5091
+ Provision for taxation 160.2 34358 34358
Total Current Liabilities 487,693.2 514,391.2 542,513.7
+ Lease liabilities 1,262 1,262 1,262
+ Deferred liabilities 32,899 32,899 32,899
Noncurrent Liabilities 34,161.0 34,161.0 34,161.0
Total Liabilities 521,854.2 548,552.2 576,674.7
+ Issued, subscribed and paid-up share capital 166,000 166,000 166,000
+ Capital reserves 204,000 204,000 204,000
+ Revenue reserves 484,604 510459.10 537693.64
Total Equity 854,604.0 880,459.1 907,693.6
Total Equity 854,604.0 880,459.1 907,693.6
Total Liabilities & Equity 1,376,458 1,429,011 1,484,368
0.23 -0.06 -0.31
Source: Bloomberg
 growth rate 5%
(1+g) 105%

FY 2023 FY 2024 FY 2025

374,019 374,019 374,019

14,993 14,993 14,993
2,434 2,434 2,434
391,446.0 391,446.0 391,446.0
275825.15 290541.26 306042.51
75302.60 79320.23 83552.20
262437.11 276438.93 291187.78
136295.02 143566.78 151226.50
12988.33 13681.29 14411.23
84675.98 89193.70 93952.46
9420.13 9922.72 10452.13
294289.07 309990.28 326529.21
1,151,233.4 1,212,655.2 1,277,354.0
1,542,679 1,604,101 1,668,800

290712 306222 322560

654 654 654
906 954 1005
42339 57984 74464
160600 160600 160600
37478 37478 37478
5091 5091 5091
34358 34358 34358
572,137.3 603,341.0 636,209.7
1,262 1,262 1,262
32,899 32,899 32,899
34,161.0 34,161.0 34,161.0
606,298.3 637,502.0 670,370.7
166,000 166,000 166,000
204,000 204,000 204,000
566381.23 596599.38 628429.77
936,381.2 966,599.4 998,429.8
936,381.2 966,599.4 998,429.8
1,542,680 1,604,101 1,668,801
0.14 0.17 0.50
 Shahdad Textile Mills

Optimal Capital Structure Recommendation

Beta (L)
Debt Equity Re Rd
0% 100% 0.13306 9.08% 0.00%
20% 80% 0.15668 9.27% 8.00%
30% 70% 0.17355 9.41% 9.00%
40% 60% 0.19604 9.59% 10.00%
60% 40% 0.27477 10.23% 12.00%
80% 20% 0.51095 12.14% 14.00%

The optimal capital structure for the company is

70% equity. Its current capital structure is 62%
38% debt financing
 WAAC
9.08%
8.55%
8.50%
8.59%
9.20%
10.38%

or the company is 30% debt and

al structure is 62% equity and
financing
 Shahdad Textiles
Forcasting Free Cash Flows

Free Cash Flows

Free Cash Flows

EBIT 2021 2022 2023 2024 2025

69,483 77,334 83,358 88,840 95,933

Depreciation Shield 39,424 51,251 66,627 86,615 112,599

108,907 128,586 149,985 175,455 208,532

(Change in NWC)
22,993 29,367 22,533 20,505 26,528
(Change in CAPEX) 52,427 50,320 65,416 85,040 110,553
Free Cash Flows 33,488 48,899 62,037 69,910 71,451

Working Capital
Working Capital

Current Assets 985,012 1,019,233 1,062,941 1,096,477 1,126,994

Current Liabilities 487,693 498,921 513,262 524,265 534,278

NWC 497,319 520,312 549,679 572,212 592,716

Change in NWC 22,993 29,367 22,533 20,505

Capital Expenditure
Capital Expenditure
Net PP&E at the end of the 301,426 374,019 486,225 632,092 821,720
previous Year
Net PP&E at the end of the
Current Year 374,019 486,225 632,092 821,720 1,068,236
Depreciation 42713 55526.9 72184.9 93840.4 121992.5
115,306 167,733 218,052 283,468 368,508
Change
52,427 50,320 65,416 85,040

Weight of debt 37.90% rd 9.89%

weight of equity 62.10% r 9.55%
T 31%
WACC 8.59%
FCF_2021`/ FCF_2022`/ FCF_2022`/ FCF_2022`/ FCF_2022`/ Horizon Value/
(1+WACC)^1` (1+WACC)^2` (1+WACC)^2` (1+WACC)^2` (1+WACC)^2` (1+WACC)^5
41468.67 48448.77 50278.61 47322.18 1122768.83 30838.67

Per Share
Price

60.10
Value of the Firm 1341125.73
(Value of Debt) 521,854.00
Value of the Equity 819,271.73

Working Capital Policy

As Per 2020
Revenue
2,290,540
(Sales)
Current
985,012
Assets
43.00%
 1,166,476
547,232

619,244
26,528

1,068,236

1,388,706
158590.3
479,061

110,553
orizon Value/

Current
Price Rs.
29.7