Image Pakistan limited (PSX: IMAGE) was incorporated in Pakistan as a public limited company in 1990. The company was formerly known as Tri-star Polyester Limited. The company changed its name in 2021. The company is engaged in the manufacturing and sale of embroidered fabric, polyester filament yarn and ready-to-wear garments. Pattern of Shareholding As of June 30, 2025, IMAGE has a total of 230.370 million shares outstanding which are held by 8307 shareholders. Local general public has the majority stake of 44.99 percent in the company followed by Directors, CEO, their spouse and minor children holding 31.90 percent shares. Other companies account for 11.18 percent shares while Modarabas and Mutual funds hold of 6.15 percent shares of IMAGE. Around 4.71 percent of the company’s shares are held by joint stock companies. The remaining shares are held by other categories of shareholders. Financial Performance (2019-25) The topline of IMAGE has shown an incredible growth over the period under consideration. The bottomline slid in 2019 and 2020 and then rode an upward trajectory since 2021. The company’s margins have oscillated over the period. Gross and operating margins fell from their optimum level in 2018 to their lowest ebb in 2023. In 2024 and 2025, gross and operating margins ticked up. Net margin also boasted its optimum level in 2018, however, bottomed out in 2020. This was followed by two years of recovery and then decline in 2023 and 2024. In 2025, net margin considerably rebounded (see the graph of profitability ratios). The detailed performance review of the period under consideration is given below. In 2019, IMAGE (formerly known as Tri-star Polyester Limited) posted 20.11 percent year-on-year growth in its topline which clocked in at Rs.386.81 million. This came on the heels of value-added embroidered fabric while the polyester filament yarn business was discontinued during the year. High cost of sales allowed the gross profit to grow by a meager 8.51 percent year-on-year in 2019 with GP margin falling down to 51.37 percent from 56.86 percent in 2018. Distribution expense posted an enormous 153 percent year-on-year rise in 2019 which was mainly on account of increase in rent expense and utility expense. Administrative grew by a marginal 3 percent year-on-year in 2019 despite the fact that IMAGE expanded its workforce from 269 employees in 2018 to 357 employees in 2019. Operating profit slid by 26.70 percent year-on-year in 2019 with OP margin clocking in at 19.24 percent versus OP margin of 31.53 percent recorded in the previous year. Finance cost grew by 34.93 percent year-on-year in 2019 on the back of increase in discount rate during the year. The company’s finance cost mainly comprised of markup on diminishing Musharka finance facility. The rise in finance cost was partially offset by other income of Rs.11.76 million recorded during the year. This was the result of liabilities written back during the year. IMAGE’s bottomline slid by 32.30 percent year-on-year in 2019 to clock in at Rs.52.67 million with EPS of Rs. 0.93 versus EPS of Rs.1.50 posted in the previous year. NP margin massively dropped from 24.16 percent in 2018 to 13.62 percent in 2019. In 2020, the local as well as global economy was hit hard by the global pandemic. In Pakistan, the lockdown began at the onset of spring-summer season when seasonal buying of fabric and garments is usually on the peak. Due to lockdown, the retail outlets of IMAGE couldn’t open during March-June, however, the topline attained 4.23 percent year-on-year growth to clock in at Rs.403.18 million - thanks to the e-sales performance. Curtailed cost due to lockdown rendered 8 percent year-on-year growth in gross profit with GP margin also ticking up to 53.26 percent in 2020. Operating expense grew by 20.52 percent in 2020 on the back of an increase in advertisement expense to boost online sales as well as elevated salaries and wages. This pushed the operating profit down by 12.45 percent year-on-year in 2020. OP margin dropped to 16.16 percent in 2020. Despite an increase in borrowings, finance cost ticked up by only 2.23 percent in 2020 as the company reduced its diminishing musharka finance facility and acquired more loans from associated parties. Net profit slid by 57.46 percent year-on-year in 2020 to clock in at Rs.22.41 million with EPS of Rs.0.39. NP margin thinned down to 5.56 percent in 2020. Poor customer traffic in the outlets in 2020 due to COVID-19 was reversed in 2021 whereby not only physical sales grew massively but online sales also outshone the last year’s figure owing to company’s continuous effort to make its online sales more seamless and hassle free. The company became the first approved Pakistani seller on Amazon in 2021 which provided further impetus to the e-sales of the company and allowed the company to have access to customers in the UK, the US and Canada. Topline did a splendid job in 2021 boasting 148.49 percent year-on-year rise to clock in at Rs.1001.85 million. Conversely, GP margin considerably shrank to 44.12 percent in 2021 due to hike in raw materials prices. Distribution expenses soared by 106.75 percent primarily on the back of an increase in advertisement expense, rent expense and utilities expense incurred during the year. Administrative expense grew by 10.75 percent year-on-year in 2021 primarily due to higher payroll expense as the number of employees grew from 206 in 2020 to 541 in 2021. Despite higher operating expense, operating profit was able to boast 205.66 percent year-on-year growth in 2021 with OP margin rising up to 19.88 percent. Although downward revisions were made in the discount rate during the year, finance cost expanded by 44.68 percent year-on-year in 2021 on the back of increased outstanding debt of the company. IMAGE’s bottomline posted a stunning year-on-year growth of 413.69 percent in 2021 to clock in at Rs.115.10 million with EPS of Rs. 2.02. NP margin also significantly improved to 11.49 percent in 2021. 2022 was characterized by store optimization activities whereby the company opened its stores in the prime locations of the key metropolitan cities and refurbished the existing ones to add further momentum to its in-store sales. The company also expanded its online store. This culminated into a year-on-year topline growth of 37.19 percent in 2022. Net sales were recorded at Rs.1374.40 million in 2022. The company also significantly revised its prices to absorb high cost of sales on the back of skyrocketing raw material prices, Pak Rupee depreciation as well as elevated fuel and energy charges. This enabled IMAGE to register 59.25 percent year-on-year growth in its gross profit with GP margin considerably improving to 51.22 percent. Distribution expenses hiked by 96.70 percent year-on-year in 2022 on the back of a rise in advertisement budget coupled with increase in salaries of sales force, higher rent expense, maintenance and utility expense. Administrative expense also surged by a whopping 116.51 percent year-on-year in 2022 on the back of higher payroll expense as employee count rose to 639 in 2022. Mounted fee and subscription charges, travelling and IT cost also played their role in driving up administrative expense in 2022. Operating profit managed to achieve 5.97 percent year-on-year growth but OP margin tapered off to 15.36 percent in 2022. The company also made other loss worth Rs. 34.36 million because it booked provisions against NIT units. Despite discount rate ticking up, the company was able to reduce its finance cost by 11.55 percent in 2022 on the back of lesser borrowings. IMAGE posted gearing ratio of 7.45 percent in 2022 versus gearing ratio of 19.05 percent recorded in 2021 (see the graph of gearing ratio and finance cost). The bottomline posted growth of 51.21 percent during the year to stand at Rs.174.05 million in 2022 with EPS of Rs.2.06. NP margin improved to 12.66 percent in 2022. With robust in-store and online sales, IMAGE registered 50.21 percent year-on-year growth in its net sales which clocked in at Rs.2064.48 million in 2023. As IMAGE tapped new geographical markets as well as new segments such as formals and semi-formals, its sales growth became more sustainable. While majority of raw materials consumed by the company was locally sourced which kept it insulated from depreciating value of local currency and the import restrictions which marred the performance of many local companies, towering indigenous inflation and elevated energy tariff didn’t spare the company and increased its cost of sales by 81.42 percent year-on-year in 2023. Gross profit rose by 20.48 percent year-on-year in 2023, however, GP margin clocked in at its 6-year lowest level of 41.08 percent. Distribution expense hiked by 14.93 percent year-on-year in 2023 on the back of mounting rent expense, utilities expense, E-commerce expense as well as sales force’s payroll expense. Administrative expense stayed intact in 2023. Operating profit burgeoned by 45.16 percent year-on-year in 2023; however, OP margin slumped to 14.84 percent. Finance cost magnified by 21 percent year-on-year in 2023 due to record high discount rate. Net profit grew by 19.39 percent year-on-year to clock in at Rs.207.80 million in 2023 with EPS of Rs.1.91. NP margin dropped to 10.07 percent in 2023. IMAGE posted year-on-year topline growth of 42.75 percent in 2024. This resulted in net sales of Rs. 2947 million in 2024. This was on account of increase in both volumes and value of the company’s products. High inflation and energy tariff resulted in 37 percent spike in the company’s cost of sales in 2024, however, with upward price revision; the company was able to drive its gross profit up by 50.92 percent in 2024 with GP margin climbing up to 43.43 percent. 48.62 percent year-on-year surge in distribution expense in 2024 was the result of increased advertising expense and shop rentals. Administrative expense also escalated by 42.82 percent in 2024 due to higher payroll expense due to inflationary pressure and also because the number of employees increased from 878 in 2023 to 881 in 2024. Operating profit strengthened by 58.11 percent in 2024 with OP margin ticking up to 16.44 percent. Other expense grew by 32.7 percent in 2024 due to higher profit related provisioning. Finance cost also mounted by 150.58 percent in 2024 due to higher discount rate despite the fact that the outstanding liabilities dropped during the year. This translated into the lowest gearing ratio of 4.29 percent in 2024. Bottomline line grew by 37.61 percent to clock in at Rs.285.95 million with EPS of Rs.1.99 and NP margin of 9.70 percent. In 2025, IMAGE’s net sales grew by 23.78 percent to clock in at Rs.3647.66 million. This was on account of a staggering rise in export sales during the year. While local sales continued to have a lion’s share in the overall sales mix, it posted a marginal growth in 2025. Higher sales volume, better prices and cost efficiency resulted in 32 percent growth in gross profit in 2025 with GP margin ticking up to 46.34 percent. Distribution expense ticked down by 1.90 percent in 2025 due to lower advertisement and promotion budget allocated for the year. Lower advertising expense was greatly offset by depreciation recorded on right-of-use assets in 2025, creating a paltry net effect on overall distribution expense. Administrative expense surged by 5.82 percent in 2025 due to higher payroll expense, utility expense and depreciation recorded on right-of-use assets. IMAGE recorded 84 percent stronger operating profit in 2025 with OP margin mounting to 24.45 percent. While the company recorded exchange gain of Rs.6.248 million in 2025, loss recorded on the disposal of operating fixed assets resulted in other loss of Rs.30.357 million in 2025. Finance cost escalated by 68.30 percent in 2025 despite monetary tightening. This was due to increased borrowings which resulted in gearing ratio of 13.53 percent in 2025 versus gearing ratio of 4.30 percent recorded in the previous year. Increased profit related provisioning resulted in 24.94 percent spike in other expense in 2025. IMAGE posted 78.88 percent improvement in its net profit in 2025 which clocked in at Rs.511.49 million. This translated into EPS of Rs.2.22 and NP margin of 14 percent in 2025. Recent Performance (1QFY26) Defying the growth momentum witnessed in the previous year, IMAGE kicked off 2026 on a sluggish note. While it’s net sales grew by 19.32 percent to clock in at Rs.778.56 million in 1QFY26, higher cost of sales, lesser value of export sales due to stronger Pak Rupee and heightened finance cost didn’t allow the topline growth to trickle down. Gross profit inched up by 3.35 percent in 1QFY26, however, GP margin fell from 54.97 percent in 1QFY25 to 47.61 percent in 1QFY26. Distribution expense ticked up by only 3.32 percent in 1QFY26 probably because lately the company has been squeezing its promotion budget. Administrative expense plunged by 7.39 percent in 1QFY26 seemingly because of high-base effect as the company recorded depreciation on right-of-use assets in the previous year. Operating profit ticked up by 6.52 percent in 1QFY26 with OP margin of 25.19 percent versus OP margin of 28.22 percent recorded in 1QFY25. Other income deteriorated by 73.39 percent in 1QFY26 probably due to no exchange gain and lesser income on bank deposits. Despite monetary easing, IMAGE recorded a massive hike of 181.69 percent in its finance cost in 1QFY26. This was due to increased borrowings. Net profit dwindled by 10.95 percent to clock in at Rs.141.425 million in 1QFY26. This translated into EPS of Rs.0.61 in 1QFY26 versus EPS of Rs.0.69 recorded in 1QFY25. NP margin also sank from 24.34 percent in 1QFY25 to 18.16 percent in 1QFY26. Future Outlook Growing export market and e-commerce sales as well as retail expansion are likely to keep IMAGE’s topline vigorous. Local raw material sourcing will protect its bottomline and margins from abrupt cost hike. However, due to adverse weather conditions, the company might have to resort to imported raw materials. Furthermore, IMAGE’s target market is largely immune from economic pressures and has high disposable income. These factors coupled with widespread improvement in macroeconomic indicators - particularly falling inflation and discount rate – will provide a productive environment for the retail sector.