While the plunge of the rupee to around Rs110 a dollar for a day sent shivers across the financial markets and the stock exchanges, it is not merely the money changers who may have had a chance to chuckle: the owners of export-oriented companies, like those of textiles, may have been pleased as well.

Keeping aside the unsavory impact of the sharp erosion in the rupee on other industrial and financial ventures of the Nishat group, the conglomerate’s flag ship company —Nishat Mills Limited (NML) — must have gone to reap healthy returns.

A company official declined to comment. Yet an investment analyst affirmed, “one per cent depreciation in the rupee augments NML’s base-case earnings by one per cent”.

According to the latest figures for the year ended June 30, 2013 released by the company, NML’s investment portfolio contributed about Rs5.90 per share in dividend income.

Along with the result announcement, NML’s Board of Directors also approved plans to submit an ‘Expression of Interest’ to participate in bids for the development of the 590MW Mahal hydropower project on River Jhelum, near the border of Rawalpindi and AJK districts.

The Board also approved a further equity investment of up to Rs400 million, and loans and advances investment of Rs2 billion, for Nishat Hospitality Pvt Limited and Nishat Linen Pvt Limited, respectively. Nishat Hospitality is currently building a four-star hotel in Lahore.

Nishat Mills Limited is the largest composite textile mill in the country. Although five other group companies are also listed on the stock exchanges — Nishat Chunian, DG Khan Cement Company, MCB Bank, Adamjee Insurance, Nishat Power and Pakgen Power — with a balance sheet footing of over Rs71 billion and total equity at Rs49 billion, NML towers above the rest.

NML has a paid-up capital of Rs3.5 million, while its reserves, at Rs46 billion, are 13 times the capital, making the company a financial rock.

The movement of the stock price of NML is closely watched by investors on the stock exchanges.

Last Friday’s closing price of NML stock of par value Rs10 stood at Rs95. Most analysts concede that unlike several other stocks, the price spiral in NML’s shares has less, if at all, to do with speculators and punters and more with fundamentals.

According to company sources, NML was established in 1951. It is very modern, and is the largest vertically integrated textile company in Pakistan.

NML maintains 198,120 spindles and 655 Toyota air jet looms. The company also has the latest version of textile dyeing and processing units; two stitching units for home textile; one stitching unit for garments, and power generation facilities with a capacity of 89MW. It also accumulates, supplies and sells electricity produced from its captive power plants.

Total exports of NML for the year 2011 amounted to Rs36.015 billion. The company claims, “due to the application of prudent management policies, consolidation of operations, a strong balance sheet and an effective marketing strategy, the growth trend is expected to continue in the years to come”.

On an unconsolidated basis, the recently released financial numbers of NML for FY13 show the company posted higher-than-expected profit-after-tax of R5.847 billion, up by a massive 66 per cent from FY12.

Evidently, the robust growth in earnings stemmed from healthier-than-projected textile operations. Sales grew by 17 per cent YoY in FY13, leading to higher gross margins of 17.3 per cent, compared to 15.1 per cent in the corresponding period last year.

The growth in revenue was on the back of strong cotton prices, firm regional demand and the depreciating local currency. Support also came from a decrease in finance cost on account of lower interest rates during the period.

However, an increase of five per cent in administrative and distribution expenses impacted earnings growth.

Industry sources suggest that the environment for the textile sector is, on the whole, encouraging.

Overall in 2MFY14 (July-August 2013), textile exports stood at $2.3 billion, registering growth of seven per cent YoY. Export data for August 2013, recently released by the Pakistan Bureau of Statistics, show that textile exports grew by three per cent over the same month last year. However, they declined nine per cent from the previous month (July 2013).

Market sources blamed the seasonal effect in the lower exports. Ironically, they also attributed the reduced exports of textiles to the unprecedented depreciation of the Indian rupee against the dollar.