Only five textile firms out of the 58 listed on the country’s stock market managed to surpass the Tk1,000 crore revenue mark in fiscal 2023-24, with Paramount Textile and Shasha Denims achieving this milestone for the first time in their history.
The three other companies in this group are Malek Spinning, Square Textile, and Envoy Textile. Malek Spinning first crossed the Tk1,000 crore revenue mark in FY18, based on its consolidated earnings, while Square Textile achieved this feat in FY21 and Envoy Textile in FY22.
Another listed company, Esquire Knit Composite, reached the Tk1,000 crore revenue milestone in FY22. However, its revenue subsequently declined to below Tk800 crore in the following years.
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Market insiders have observed that most listed textile firms are fundamentally weak, with 21 of them classified under the Z category commonly referred to as the “junk stock” category due to their failure to pay dividends and, in some cases, ceasing operations altogether.
The managing director of a brokerage firm said a few textile companies listed on the market benefit from efficient management and strong corporate governance practices. Consequently, their businesses have continued to grow gradually, even in an unfavourable economic environment.
However, he added that most companies fail to follow good corporate practices. They managed to get listed on the market with assistance from the securities regulator, despite lacking the necessary qualifications to do so.
Parveen Mahmud, chairman of Shasha Denims, stated in the company’s FY24 annual report that consolidated export growth reached 30.21% compared to the previous year a significant milestone, as the company’s consolidated exports surpassed Tk1,000 crore for the first time.
This achievement was made possible with the support of its two subsidiary companies, as highlighted in the annual report.
Shams Mahmud, managing director of Shasha Denims, noted in the annual report that despite economic challenges and volatile conditions both globally and domestically, the company made its best efforts to sustain revenue growth.
To maintain this momentum, the company invested in enhancing its production capacity, as outlined in the report.
Shasha Denims shares closed at Tk17.60 on Thursday, 1.12% lower than the previous session. It paid a 10% cash dividend to its shareholders in the last fiscal year.
Shakhawat Hossain, managing director of Paramount Textile, said in the company’s annual report that the country’s economy is currently facing significant challenges, including global economic uncertainty, rising inflationary pressures, energy shortages, a balance-of-payments deficit, revenue shortfalls, increasing exchange rates, and higher prices for oil, gas, and transportation. These factors have severely disrupted the company’s production.
Despite these crises, he highlighted that the company made reasonable progress in 2024, navigating the challenges in the textile industry.
Paramount Textile shares closed at Tk46.80 on the Dhaka bourse. It paid a 5% cash and a 10% stock dividend to its shareholders in the last fiscal year.
Tapan Chowdhury, chairman of Square Textile, stated in the company’s annual report that despite a sharp decline in foreign currency reserves, the RMG sector regained its position as the largest export earner, thanks to several monetary and fiscal measures.
However, the sector faced challenges due to a disproportionate increase in the prices of raw materials and machinery, which need to be imported, while the prices of products abroad grew only marginally.
Chowdhury expressed optimism, noting that with both the government and industry entrepreneurs focusing on product and market diversification, the RMG sector is expected to gain greater bargaining power and achieve higher export revenues in the near future.
Square Textile shares closed at Tk50 on Thursday, 0.60% lower than the previous session. It paid a 32% cash dividend to its shareholders in the last fiscal year.
Tanveer Ahmed, managing director of Envoy Textile, stated that the company reported a 28.54% growth in revenue in the last fiscal year, driven mainly by a surge in global demand for denim fabrics, with volume increasing by 25%.
Kutubuddin Ahmed, chairman of Envoy Textile, said global brands, particularly from Europe, America, and East Asia, have increased their sourcing volumes from Bangladesh.
Envoy Textile shares closed at Tk39 on Thursday, 2.20% lower than the previous session. It paid a 20% cash dividend to its shareholders in the last fiscal year.