Evince Textiles financial analysis: margin recovery to 14% in 9M FY26, BDT 2.9bn net debt (Oct 2026)

Investment considerations: margin back to 14.2% in 9M FY2026, but financial expenses absorb most of operating profit

Evince Textiles Limited (ETL) makes 100% cotton yarn-dyed woven fabric and denim at one factory at Shirir Chala, Gazipur [1 p.80]. Its notes describe the business as 'Manufacturing, Dyeing & Finishing of 100% cotton woven & Denim fabrics and exporting the same to local garments manufactures as deemed exporter' [1 p.80]: the customers are export garment factories in Bangladesh, paid through export letters of credit. The company reports one business and geographic segment [1 p.107]. Turnover was BDT 3,297m in FY2025 (year to June), down from BDT 3,973m, on 12.84m yards sold [1 p.99]. As the filings describe a weaving, dyeing and finishing mill, this note uses the woven fabric and denim sector format (F11) rather than the yarn-spinning format under which the sector files list ETL.

The financial record of the last decade is one of falling margins and rising borrowing. Gross margin was 22.1% in FY2017 and has fallen in every year since, to 9.3% in FY2025 [3 p.26] [1 p.25] [13]. Profit after tax went from BDT 186m in FY2017 to a loss of BDT 27m in FY2022 and a profit of BDT 54m in FY2025. Over the same years total assets grew from BDT 4.18bn to BDT 5.82bn while equity stayed between BDT 2.1bn and 2.4bn [3 p.26] [1 p.25]. The nine months to March 2026 broke the margin trend: gross margin was 14.2% and profit after tax BDT 42.2m against a loss of BDT 21.6m a year earlier [2 p.2].

Business: one Gazipur mill, 22m yards of weaving capacity, sold as deemed exports to local garment makers

ETL was incorporated on 3 June 1999 and started commercial production on 2 May 2003; it became a public limited company in June 2013 [1 p.80]. It raised BDT 170m in an IPO subscribed in May 2016, spent on civil construction, machinery and IPO expenses, with utilisation completed in October 2017 [1 p.24]. The directors' report says that after the IPO 'the production capacity of the company was enhanced by about 25%' [1 p.24].

Until 2023 ETL had a subsidiary, Evitex Fashions Limited, and published consolidated and solo accounts; in FY2021, for example, consolidated turnover was BDT 1,604m and solo BDT 1,425m [3 p.26]. The High Court Division approved the amalgamation of Evitex Fashions into ETL on 1 March 2023 [1 p.80], and 792,000 shares were issued on 28 January 2024 for the amalgamation, taking the share count to 183,744,000 [1 p.98]. The ten-year series in this note uses the consolidated figures where both were printed.

The plant covers the whole chain after yarn: yarn dyeing, warping, sizing, weaving and finishing, with two laboratories for colour matching [1 p.23]. Installed annual capacity is 6.0m kg of dyeing, 22.0m yards of weaving and 39.0m yards of finishing [1 p.106]. Gas comes from Titas Gas; the company has dual-fuel firing, a 3,000 kW electricity sub-station connected to Gazipur Palli Bidyut Samity-2 [1 p.23], and a solar power bill of BDT 4.2m first appeared in FY2025 [1 p.100].

Product mix is moving toward denim. The FY2025 notes say 'FOB rate reduced for Denim Fabrics from $ 2.56 to $ 2.39' a yard [1 p.107], and the Q3 FY2026 notes say 'we emphasis the denim production rather y/d production', with order intake not aligned with the schedule during a a transitional period (printed 'trangisional' [sic]) of moving the finishing machine and installing a new dyeing machine and generator [2 p.5]. The company does not print a split of revenue between yarn-dyed fabric and denim.

Ten-year record: turnover peaked at BDT 3.97bn in FY2024; gross margin fell from 22.1% to 9.3%

Turnover has moved in a wide band. It was between BDT 2.2bn and 2.4bn from FY2016 to FY2019, fell to BDT 1.96bn in FY2020 and BDT 1.60bn in FY2021, the lowest of the ten years, then rose to BDT 3.97bn in FY2024, the highest, before falling 17.0% to BDT 3.30bn in FY2025 [4 p.23] [3 p.26] [1 p.25] [13]. The FY2021 annual report linked that year's decline to COVID-19: a 14-day factory closure and cancelled or deferred export orders [3 p.26]. The FY2025 directors' report links the fall to 'scarcity of gas supply, political turmoil', worker unrest at customers and customers' banking problems [1 p.24].

Profit did not follow turnover. FY2024, the year of highest turnover, had a gross margin of 10.5%, about half the 22.1% of FY2017. Pre-tax margin was 8.6-10.0% in FY2016-FY2019 and between 0.1% and 4.0% from FY2020 to FY2025 [13]. The directors' report gives its own reasons for the post-IPO decline: 'the increase of cost of raw materials, utility cost like gas & fuel and higher Bank interest' and 'the fall of price of fabric in the international market' [1 p.24].

Line items: volume fell 21% in FY2025; overhead stayed near BDT 950m; FX gains carried pre-tax profit

Revenue. All FY2025 turnover was export (deemed export) of fabric: 12,844,729 yards at an average BDT 256.72 a yard, BDT 3,297m [1 p.107]. FY2024 was 16,236,250 yards for BDT 3,973m [1 p.99], or BDT 244.70 a yard (derived) [13]. Volume fell 20.9% and taka revenue per yard rose 4.9%, while the company reports a lower dollar denim price (USD 2.56 to 2.39 a yard) [1 p.107]; the taka figure includes the exchange rate and mix, which the filing does not split. In 9M FY2026 the company sold 8,654,377 yards at a printed 'Export Rate' of 2.23, which is export value in USD divided by yards (USD per yard, derived by the company, not an FOB quote), against 9,418,367 yards at 2.16, so export value in dollars fell from USD 20.37m to USD 19.30m [2 p.5].

Raw materials. Raw material consumed was BDT 1,974m in FY2025, 66.0% of cost of goods sold, down from BDT 2,610m [1 p.99]. Yarn is the main input: imports of yarn were BDT 1,771m in FY2025 against BDT 2,501m in FY2024 [1 p.99]. Per yard sold, raw material fell from BDT 160.76 to BDT 153.65 [13]. Part of the yarn comes from Argon Spinning, a company under common directorship (see governance).

Factory overhead. Factory overhead was BDT 951m in FY2025 against BDT 980m, nearly flat while volume fell by a fifth [1 p.100]. Within it, wages and salary rose 25.4% to BDT 328.1m and the gas bill fell 14.8% to BDT 274.3m; depreciation was BDT 194.6m [1 p.100]. Gas plus electricity, CNG, diesel and solar came to 11.1% of turnover in FY2025 and factory wages to 9.9%, up from 6.6% [13]. With a largely fixed overhead and weaving utilisation down from 82.3% to 67.7% [1 p.106], gross margin fell from 10.5% to 9.3%.

A presentation change affects comparisons. The FY2025 notes say: 'Earlier Working Capital interest is charged under material consumption. This year it is rearranged by separating form Raw Materials and presented under Financial expenses' [1 p.102]. Gross margins printed before FY2024 may therefore include some interest in cost of sales; the five-year table does not restate them.

Operating expenses and incentives. Administrative, selling and other expenses were BDT 127.1m in FY2025, of which salary and allowances BDT 56.5m and bank charges BDT 14.5m [1 p.101]. In the annual accounts the government cash incentive on exports (BDT 19.9m in FY2025, BDT 6.9m in FY2024) sits in other income [1 p.102]. The Q3 FY2026 statement shows 'Export Incentive' as a separate line under gross profit: BDT 53.4m in 9M FY2026 against BDT 10.9m [2 p.2].

Foreign exchange. The FY2025 notes split the foreign exchange line into a realised gain of BDT 132.3m and an unrealised loss of BDT 14.6m, a net BDT 117.7m, and say this line was previously presented 'under Turnover and Other Income' [1 p.101]. The FY2025 gain was 226% of profit before tax; in 9M FY2026 the line was a loss of BDT 23.9m against a gain of BDT 107.9m in 9M FY2025 [2 p.2] [13].

Financial expenses and tax. Financial expenses were BDT 264.4m in FY2025 (BDT 125.0m on long-term borrowings, BDT 137.8m on short-term borrowings) against BDT 221.2m [1 p.102], and BDT 204.2m in 9M FY2026 against BDT 158.2m [2 p.2]. The FY2025 tax line was a net credit of BDT 1.6m: current tax of BDT 37.3m less a deferred tax credit [1 p.77] [1 p.103]. The auditor notes that WPPF is now allowed as a tax deduction [1 p.70].

Ratios: ROE of 2.3% in FY2025 and a 257-day cash cycle; current ratio below 1.0x since FY2023

Returns. Return on average equity was 7.7-8.9% in FY2017-FY2019 and has been between -1.2% and 4.6% since FY2020; FY2025 was 2.3% [13]. Asset turnover ranged from 0.32x (FY2021) to 0.65x (FY2024), and ROA was 0.9% in FY2025 [13].

Liquidity. The current ratio was 1.85x in FY2016 [4 p.23] and has been below 1.0x since FY2023 (0.94x at June 2025) [1 p.26] [13]. The cash conversion cycle was 257 days at June 2025, made of 103 receivable days and 159 inventory days, with trade payables of only 5 days [13]; most import credit sits in short-term loans (back-to-back LC liability of BDT 424.8m at June 2025) rather than in trade payables [1 p.95].

Margins in the nine months. Gross margin of 14.2% and an operating margin of 12.5% in 9M FY2026 compare with annual gross margins of 17.5% in FY2020 and 14.0% in FY2021 [13]. The DSE-announced FY2026 EPS of BDT 0.31 against 9M EPS of BDT 0.23 implies BDT 0.08 for April-June 2026 (derived) [5].

Balance sheet: net debt of BDT 2.85bn against BDT 22m of cash; a BDT 344m customs demand is pending

Debt. At 30 June 2025 long-term loans from Pubali Bank and Sonali Bank were BDT 880.0m including current maturity (BDT 756.8m non-current and BDT 123.2m current) [1 p.76], finance lease from LankaBangla Finance BDT 3.6m [1 p.94], and short-term loans BDT 2,119.5m [1 p.76]. The auditor's key audit matter states that short-term loans of BDT 2,119,506,357 'less BTB liability BDT 424,824,374 implies BDT 1,694,681,983 as funded loan' [1 p.71]. Net debt including leases was BDT 3,000m at June 2025 and BDT 2,853m at March 2026, 1.21x equity [2 p.1] [13].

Cash. Cash and cash equivalents were BDT 9.7m at June 2025 and BDT 22.0m at March 2026, with a BDT 13.7m fixed deposit [1 p.76] [2 p.1]. Cash flow from operations was BDT 599.2m in FY2025 and BDT 755.6m in 9M FY2026 [1 p.79] [2 p.4]. ETL shows financial expenses paid in financing activities, so operating cash flow is before interest; after capex and interest paid the figure was BDT 255m in FY2025 and BDT 193m in 9M FY2026 [13]. The FY2025 statement also notes that the prior year's operating cash flow 'has been rearranged by considering foreign exchange gain or loss and BTB Purchase' [1 p.104].

Receivables and inventory. Export bills receivable were BDT 928.5m at June 2025, all printed as good and secured [1 p.90], and BDT 579.2m at March 2026 [2 p.1]. Inventory was BDT 1,306m at June 2025: raw materials BDT 782.9m (yarn BDT 623.6m), work in process BDT 311.1m and finished fabric BDT 155.6m [1 p.90].

Contingent liabilities. A customs demand of BDT 344,488,554 (Customs Appeal No. 418 of 2021) is pending before the High Court Division, backed by a BDT 17.2m bank guarantee; bank guarantees of BDT 85.1m are in favour of Titas Gas [1 p.107]. The customs demand equals 14.6% of June 2025 equity (derived).

Audit. G. Kibria & Co. replaced Pinaki & Company, which gave 'an unmodified opinion dated 28 October 2024' on FY2024 [1 p.72]. The FY2025 opinion reads: 'In our opinion, the accompanying financial statements give true and fair view, in all material respects, of the financial position of the company as at 30 June 2025' [1 p.67]. Under 'Emphasis of Matters' the auditor writes that 'Though the Company has made provision for BDT 7,903,760 for WPPF in the Statement of Profit or Loss and Other Comprehensive Income for the year 2023-2024, the company has not paid any amount to employees and to the government fund within nine months from year end' [1 p.67], and that the company paid 'BDT 790,376 to Bangladesh Worker Welfare Foundation Fund on 22 May 2025 and BDT 790,376 to Welfare Fund on 06 October 2025' [1 p.68]. Key audit matters were revenue and receivables, inventory, deferred tax, property, plant and equipment, and loans [1 p.68] [1 p.69] [1 p.70] [1 p.71].

Earnings quality: FY2025 cash flow came from working capital and an interest add-back; profit from FX gains

Operating cash flow has run well ahead of profit, and the reconciliation shows where it came from. In FY2025 the BDT 599.2m of operating cash flow started from profit before tax of BDT 52.1m, added back financial expenses of BDT 264.4m and depreciation of BDT 196.4m, deducted tax paid of BDT 37.4m, and then took in BDT 176.7m from lower inventories and BDT 32.2m from lower receivables [1 p.105]. Two items in that bridge are not operating profit: the working-capital release from lower inventory and receivables, and the add-back of interest, which ETL shows as paid in its financing section [1 p.79]. After capex and interest paid the FY2025 figure was BDT 255m, against dividends paid of BDT 45.5m [13].

In FY2025 profit before tax was smaller than the sum of two non-operating lines: the foreign exchange gain (BDT 117.7m) and other income (BDT 20.4m, mostly the BDT 19.9m cash incentive) together exceeded profit before tax, and the tax line was a net credit of BDT 1.6m from deferred tax [1 p.77] [1 p.102]. Without the foreign exchange line, FY2025 would have shown a pre-tax loss of BDT 65.6m (derived) [13]. The cash incentive is linked to export proceeds, and the auditor lists it in the revenue key audit matter alongside export revenue of BDT 3,297m and receivables of BDT 928.5m [1 p.68]. The auditor also notes that the timing of revenue recognition and realisation 'increases the risk of exposure of revenue to foreign exchange fluctuations' [1 p.68]. The FY2025 notes record a realised exchange gain of BDT 132.3m and an unrealised loss of BDT 14.6m [1 p.101]. In 9M FY2026 the order was reversed: gross profit and the export incentive line carried the result and the foreign exchange line was a loss [2 p.2].

Capital allocation. Capex (property, plant and equipment plus capital work-in-progress) was BDT 411.4m in FY2024, BDT 80.7m in FY2025 and BDT 358.2m in 9M FY2026 [1 p.79] [2 p.4]. Long-term loans were repaid on balance: BDT 58.1m in FY2025 and BDT 148.4m in 9M FY2026, while short-term loans rose by BDT 33.6m in the nine months [1 p.79] [2 p.4]. Cash dividends have been kept at 2.25-2.5% of par since FY2023 [1 p.98] [5]. No share buy-back, rights issue or bonus share has been announced in the 24 months of DSE news reviewed [5].

Per-share data. The share count has been 183,744,000 since January 2024 [1 p.98]. EPS figures printed in older five-year tables were not restated for later share issues: for example FY2022 EPS is printed as BDT (0.12) while the printed loss of BDT 27.1m divided by 182,952,000 shares is BDT (0.15) (derived) [1 p.26]. This note uses each report's printed EPS and flags derived figures.

Peers: ETL's 8.7% finance-cost ratio is the highest of three listed fabric mills in the nine months to March 2026

The comparison uses the nine months to 31 March 2026 from each company's own interim statement, the period ETL last reported in full. Before using the peers we read their latest audit opinions. Argon Denims' FY2025 auditor states that the financial statements 'give a true and fair view' [7 p.70], and Envoy Textiles' FY2026 auditor uses the same words [9 p.3]; neither opinion page carries an emphasis of matter. ETL's report describes its managing director as running Argon Denims as well [1 p.12].

Basis. All three print a line called 'Financial Expenses'; none of the three nets interest income against it on the face of the statement [2 p.2] [6 p.2] [8 p.3]. ETL and Argon show export incentive as a line below gross profit; Envoy includes export incentive (BDT 119.0m) and a foreign exchange gain (BDT 52.2m) in revenue [8 p.17], so we removed both from Envoy's revenue and gross profit. All three deduct WPPF below the operating line. Envoy also sells cotton and dyed yarn (BDT 836.7m of the nine months) [8 p.17].

On that basis ETL's gross margin of 14.2% was above Argon's 8.3% and below Envoy's 19.3%. ETL's financial expenses were 8.7% of sales, the highest of the three, against 1.8% at Argon and 8.2% at Envoy; ETL's net margin of 1.8% was the lowest of the three [13].

Governance: directors and officers hold 33%; BDT 512m of yarn came from sister company Argon Spinning in FY2025

Ownership. Directors and officers held 60,528,520 shares (32.94%) at June 2025 and institutions and the general public 123,215,480 (67.06%) [1 p.27]. The chairman, Anwar-ul Alam Chowdhury, and vice chairman, Shabnam Shehnaz Chowdhury, held 7,834,464 shares each; A.K. Gouhor Rabbani 15,271,740; Abu Kawser Majumder (managing director) 11,596,740; Md. Akhter Shahid 10,181,160 [1 p.26]. In April 2025 three directors gifted shares to family members outside the trading system: Abu Kawser Majumder 3,675,000 to his son, and Anwar-ul Alam Chowdhury and Shabnam Shehnaz Chowdhury 1,837,440 each to Ms. Sanjana Shehnaz Chowdhury, named in each notice as the director's daughter [5].

Board. The board has nine members including two independent directors, M. Shahjahan Bhuiyan (chair of the audit and nomination committees) and Hedayet Ullah Chowdhury, both from 24 April 2025 [1 p.8] [1 p.26]. The previous independent director's position was 'declared vacant with effect from the close of business on 24 April 2025' under section 108(1) of the Companies Act [1 p.27]. Abu Kawser Majumder is described as running 'Argon Denims Ltd., Evince Textiles Ltd., and Argon Spinning Ltd.' [1 p.12].

Related parties. The FY2025 related-party table, as printed [1 p.24]: Argon Spinning Limited, 'Import (demeed) of Yarn', BDT 511,736,175 (balance BDT 225,523,966); Evitex Dress Shirt Limited, export of fabrics, BDT 138,126,295 (balance BDT 46,519,137); Evitex Apparels Limited, export of fabrics, BDT 129,267,178 (balance BDT 35,444,547); Evince Garments Limited, export of fabrics, BDT 3,948,860 (balance BDT 2,946,727); Evince Design and Fashions Ltd., selling expenses, BDT 6,133,334 (balance BDT 639,599); Evince Limited, nil in FY2025 (BDT 1,428,821 in FY2024). The table's printed total of BDT 803,611,841 also includes directors' remuneration of BDT 14.4m. Fabric sales to the three garment companies sum to BDT 271.3m, 8.2% of FY2025 turnover (derived). The report states that the Argon Spinning yarn purchase 'is 15.52% of total revenue' and that such transactions require shareholder approval at the AGM under a BSEC notification of 22 March 2021 [1 p.24].

Directors' pay. Remuneration payable to directors rose from BDT 30.0m to BDT 40.8m during FY2025: BDT 14.4m was provided and BDT 3.6m paid [1 p.97].

Dividends and capital actions. ETL paid cash dividends of 2.25% for FY2023 and 2.5% for FY2024 [1 p.98], recommended 2.5% for FY2025 (EPS BDT 0.29) and 2.5% for FY2026 (EPS BDT 0.31) [5]. At BDT 0.25 a share the FY2026 dividend is 81% of EPS (derived). The FY2019 report records a 2% cash and 10% stock dividend for that year [4 p.23]. The 24-month DSE news sweep (October 2024 to November 2026) shows one capex approval (the August 2025 denim machinery) and no rights issue, merger or plant-closure notice [5].

What's next: dividend record date 22-Nov-2026, AGM 10-Dec-2026, Q1 FY2027 results

Results for FY2026 were announced on 28 October 2026 and are in the text above (EPS BDT 0.31, NAV BDT 12.89, NOCFPS BDT 3.54) [5]. MISSING FILING: the audited FY2026 annual report is not yet in our corpus; this note uses the nine-month statements for line items. Dated items after 31 October 2026:

Earlier items, outcomes not yet in a filing: the August 2025 board decision listed 'A. Contineous Denim Dyeing Sizing Machine' and 'B. Highspeed Warping Machine' (Panon/Taiwan) with 'Total Value including Freight charges: USD 1,200,000', BDT 146,232,000 [5] (passed), commissioning date not disclosed. The notice prints that value after item B only, so it is not clear whether the USD 1.2m covers both machines. The FY2025 directors' report says the denim expansion's effect 'is anticipated to be reflected in the results of the next financial year' [1 p.24]; capital work-in-progress of BDT 923.4m at March 2026 included the machinery line [2 p.1].

Risks: interest, gas and the exchange rate each moved FY2025 profit by more than half

Each risk below is tied to the line it moves, with the size of that line in the filings. Sensitivities are historical only: in FY2025 each 1 percentage point of gross margin on BDT 3,297m of turnover was BDT 33.0m, 63% of profit before tax (derived) [1 p.77].

Key questions: the margin, the interest bill and the new denim machinery

ETL at BDT 13.6 trades at 43.9x the DSE-announced FY2026 EPS of BDT 0.31 and 1.06x NAV of BDT 12.89, with a dividend yield of 1.8% [12] [5]. These multiples are stated as facts only.

FAQ

What does Evince Textiles make?

100% cotton yarn-dyed woven fabric and denim, sold to local export garment makers as deemed exports [1 p.80].

What were Evince Textiles' FY2026 results?

EPS BDT 0.31, NAV per share BDT 12.89 and NOCFPS BDT 3.54 for the year to 30-Jun-2026, with a 2.5% cash dividend [5].

Is Evince Textiles' audit opinion qualified?

No. The FY2025 opinion is unmodified, with an emphasis of matter on unpaid WPPF for 2023-2024 [1 p.67].

How much debt does Evince Textiles have?

Total borrowings including leases were BDT 2,889m at 31-Mar-2026 against cash and deposits of BDT 35.7m [2 p.1].

Who are Evince Textiles' related parties?

Argon Spinning (yarn, BDT 511.7m in FY2025) and garment companies Evitex Dress Shirt, Evitex Apparels and Evince Garments (fabric sales) [1 p.24].

When is the next AGM?

10 December 2026; record date 22 November 2026 [5].

Sources

1. Evince Textiles Limited Annual Report 2024-2025 (year to 30-Jun-2025), audited, G. Kibria & Co. · link · accessed 2026-10-31
2. Evince Textiles Limited un-audited financial statements, nine months to 31-Mar-2026 (Q3 FY2026) · link · accessed 2026-10-31
3. Evince Textiles Limited Annual Report 2020-2021 (five-year table FY2017-FY2021, consolidated and solo) · link · accessed 2026-10-31
4. Evince Textiles Limited Annual Report 2018-2019 (five-year table incl. FY2016) · link · accessed 2026-10-31
5. Dhaka Stock Exchange, ETL news archive Oct-2024 to Nov-2026 (old_news.php, criteria=3) · link · accessed 2026-10-31
6. Argon Denims Limited un-audited statement of profit or loss, nine months to 31-Mar-2026 · link · accessed 2026-10-31
7. Argon Denims Limited Annual Report 2024-25, independent auditor's report · link · accessed 2026-10-31
8. Envoy Textiles Limited statement of profit or loss, third quarter ended 31-Mar-2026 · link · accessed 2026-10-31
9. Envoy Textiles Limited annual financial statements, year to 30-Jun-2026, independent auditor's report · link · accessed 2026-10-31
10. The Daily Star, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
11. The Business Standard, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
12. AnalystBro price data (TradingView feed): DSE:ETL daily bars to 29-Oct-2026 · link · accessed 2026-10-31
13. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31