Nishat Mills Limited Case Study

Abstract: Nishat Mills Limited (NML) is the largest textile compound unit of Pakistan that is engaged in the business of textile manufacturing and of spinning, combing, weaving, bleaching, dyeing, printing, stitching, buying, selling and otherwise dealing in yarn, linen, cloth and other goods and fabrics made from raw cotton, synthetic fiber and cloth, and to generate, accumulate, distribute and supply electricity.

The market for clothing, home textile and accessories has always been vast and full to the brim with potential. More and more people are jumping on to the bandwagon and coming up with their own brands of fabric & apparel with tall claims of high quality and uniqueness. In the midst of so much competition, Nishat Mills Limited came

The main raw material of textile and clothing industry is cotton. The textile industry in Pakistan achieves cost advantage in the segment of apparel as well as home textiles with the help of unending supply of local staple cotton which have been domestically produced. Further, Government and other policy makers have taken definitive steps for improving the amount and quality of cotton yield for making sure that higher productivity can be achieved.

(B) BARGAINING POWER OF CUSTOMERS

The bargaining power of customers is also a threat for a firm operating in industry. The buyers affect the profitability in such a way that he wants discounts and other services which might lower the margin of profit for the company. The demand forces inside the industry can be evaluated with the help of bargaining power which the buyers of the industry possess.

(C) THREAT OF NEW ENTRANTS

This factor that is threat of new entrants helps in increasing the competitive nature inside the industry to a greater level. On the other hand the threat is also instrumental in bringing increased amount of capacity in the market. Threat of new Entrants For Nishat mills there has been a threat of entering new firms, So to defend themselves from this threat they gain economies of scale And the other barriers which Nishat mills create for entrants are; Product differentiation & Switching

ii: Data does not reflect the true situation

Financial statements are prepared in accordance with the accounting standards and assumptions, which maybe not necessarily & fully reflect the objective reality.

Over the last ten financial years Nishat has been able to show excellent financial performance end has maximized the value for its shareholders through payment of dividends and increasing net worth of company. The stake holders’ trust in the company has allowed the company to maintain row thin its revenue, gross profit, net profit and total assets. The trend analyses of financial performance in last ten financial years are mentioned in the next slides. Nishat’s strength lies in its focus on organic growth through development of its productions facilities, expansion of business to new markets, search of new customers and maintaining excellent investment portfolio.

7. General Market