Khan Brothers PP Woven Bag financial analysis: local sales lift 9M revenue 161%, qualified audits, BDT 690m flagged assets (Oct 2026)

Investment considerations: revenue up 161% on restarted local sales, against BDT 690m of balances three audits could not verify

Khan Brothers PP Woven Bag Industries Ltd. (KBPPWBIL) makes polypropylene (PP) woven bags, the sacks used to pack cement, fertiliser, food grains, animal and fish feed, sand and chemicals [1 p.10]. It was incorporated in 2006, began commercial production on 1-Dec-2007 and listed on the Dhaka and Chittagong exchanges after a 2014 IPO of 20m shares at BDT 10 [1 p.10] [1 p.73]. Its stated installed capacity is 6.95 crore (69.5m) bags a year [1 p.10]. For most of its listed life it described itself as a '100% export-oriented' maker selling mainly to Europe [1 p.14] [1 p.15].

That model broke down. Revenue fell from BDT 779m in FY2017 to BDT 239m in FY2020 and BDT 91m in FY2022 [7 p.17] [1 p.16]. The company told DSE in August 2025 that its exports had been suspended since 2022 and that its revenue since then came only from sub-contract work [10]. That work is 'toll manufacturing' for a sister company, Khan Brothers Bag Industries Ltd., under an agreement signed on 22-Jun-2021 [1 p.68]: the sister company supplies the raw material and KBPPWBIL charges for conversion. In August 2025 the board decided to start direct local sales again, buying raw material in the local market [10], and the nine months to March 2026 show the effect: revenue of BDT 213.6m, of which BDT 146.3m was local sales and BDT 67.3m toll revenue [2 p.10].

The filings show two sets of facts. Revenue and profit rose from a low base in FY2025 and the nine months to March 2026. The balance sheet carries large items that three successive audits have not been able to verify, and the company's own books, by the auditor's account, are incomplete. The callouts below set out both sides as the filings show them.

Business: a former exporter that spent FY2022-FY2025 as a toll converter for a sister company and restarted local sales in 2025

Products and customers. The company buys PP yarn, HDPE, LDPE and LLDPE resin, calcium carbonate, printing ink and colour master batch, weaves PP cloth and converts it into plain, laminated and kraft-paper-laminated bags [1 p.10]. The corporate-business note also lists FIBC (jumbo) bags, HDPE and LDPE bags, liners and multi-layer sack kraft paper [1 p.58]. Woven sacks are a commodity input for cement, fertiliser, rice, feed and chemicals, so volume follows those industries and price follows resin. The company reports one segment [1 p.14].

Three phases. From FY2017 to FY2019 it was an exporter with revenue of BDT 579-779m and gross margins of 13-17% [7 p.17] [16]. Revenue then fell 59% in FY2020 to BDT 239m and kept falling; the directors blamed COVID-19 and the war in Ukraine for the collapse of European export orders [1 p.15] [7 p.16]. From FY2022 to FY2025 the factory ran almost entirely as a toll converter for Khan Brothers Bag Industries Ltd., a sister company in the same premises, earning BDT 75-102m a year [1 p.16] [1 p.68]. Since the August 2025 board decision it has sold bags directly in the local market alongside the toll work [10] [2 p.10].

Scale and people. The workforce shrank with the business: 265 permanent workers in FY2021 and 150 in FY2025, with 44 temporary workers and 20 officers and staff in both years [7 p.11] [1 p.10]. The FY2025 capacity note states installed capacity of 8.70 crore bags and 'actual capacity' of 6.95 crore [1 p.73]; it gives no production volume, so utilisation cannot be calculated from the filings. In November 2025 the company told DSE that it produced more with the same staff and workers 'according to the present capacity of machineries' [10].

The group. KBPPWBIL is part of the Khan Brothers group. It owns BDT 1.05m (at face value) of two group companies, Khan Brothers Knitwear Industries Ltd. and Khan Brothers Group of Industries Ltd. [1 p.64]. The FY2023 and FY2024 auditors found two other group factories, Khan Brothers Bag Industries Ltd. and Khan Brothers Marble & Granite Ltd., 'operating in full swing within the same premises' with a single entry [5 p.46] [4 p.46]. The chairman is Mohammed Enamul Kabir Khan and the managing director Tofayel Kabir Khan [7 p.17] [1 p.72].

Line items: local sales of BDT 146m drove FY2026 revenue; toll revenue fell 18% and raw material returned to cost of sales

Revenue. Revenue has two lines since July 2025. Toll manufacturing revenue was BDT 74.8m in FY2024 and BDT 102.4m in FY2025 (+36.8%) [1 p.68]; in the nine months to March 2026 it was BDT 67.3m, 17.7% lower than the BDT 81.7m of the same period a year earlier [2 p.10]. Local sales, absent in FY2024 and FY2025, were BDT 146.3m [2 p.10]. So the FY2026 growth comes from the new direct sales; toll work for the sister company shrank. The company does not disclose volumes, bag prices or customers for either line, so the split between volume and price cannot be measured.

Cost of sales. While the plant only did toll work, cost of sales had no raw material: it was factory wages (BDT 22.3m in FY2025) and a 'toll manufacturing cost' of BDT 31.0m, of which BDT 23.3m was depreciation [1 p.69]. Gas, electricity and diesel together were BDT 4.0m in FY2025 against BDT 4.9m in FY2024 [1 p.69]. With local sales the raw-material line returned: the company bought BDT 90.5m of material in the nine months and consumed BDT 69.9m [2 p.10]. Electricity rose from BDT 0.7m to BDT 5.4m year-on-year in the nine months [2 p.11]. Raw material is imported resin priced in dollars, so resin prices and the taka-dollar rate now feed into the cost line as they did before 2021.

Gross margin. Because depreciation is a large fixed part of cost, margin moves with revenue. Gross margin was 11.8% in FY2023, 21.7% in FY2024 and 47.9% in FY2025 [16]. In FY2025 revenue rose by BDT 27.6m while cost of sales fell by BDT 5.2m [1 p.16]. The nine-month FY2026 margin was 38.5%, lower than FY2025 because local sales carry material cost, but gross profit in money terms rose from BDT 27.8m to BDT 82.2m [2 p.2]. History gives one sensitivity: in FY2025 each BDT 1m of extra toll revenue went almost entirely to gross profit, since total toll cost did not rise.

Operating expenses. Administrative expenses fell from BDT 11.0m in FY2024 to BDT 7.1m in FY2025 and were BDT 3.7m in the nine months to March 2026 against BDT 5.1m a year earlier [1 p.71] [2 p.11]. The biggest fixed items are the DSE listing fee (BDT 1.0m), audit fee (BDT 0.6m) and depreciation [1 p.71]. In the nine months the accrued listing and audit fees were no longer shown as payable [2 p.9]. Directors received only meeting allowances, BDT 49,800 in FY2025; the managing director drew no salary [1 p.72].

Finance and other income. Financial expenses (gross, as printed; interest income is shown separately as non-operating income) were BDT 2.4m in FY2025, almost all interest on the Mutual Trust Bank machinery loan [1 p.72], and BDT 1.4m in the nine months [2 p.11]. Non-operating income is interest on fixed deposits: BDT 1.8m in FY2025 and BDT 2.3m in the nine months [1 p.72] [2 p.2]. No interest has been accrued on the People's Leasing deposit since 21-Jul-2019 [1 p.47].

Tax. Current tax in FY2025 was a tax on turnover of BDT 8.2m plus BDT 0.4m on other income; with BDT 3.8m of deferred tax the charge was BDT 12.4m, an effective rate of 32.3% [1 p.72] [16]. The nine-month FY2026 rate was 25.3% [16]. The company recognises tax but has not paid it: the provision was BDT 22.1m at June 2025 after no payment in FY2025, and BDT 38.9m at March 2026 [1 p.68] [2 p.10]. Workers' profit participation fund provisions (5% of profit) began again in FY2025 [1 p.68].

Quarters: revenue of BDT 64-76m a quarter in FY2026 against BDT 21-29m in FY2025

Quarter by quarter. Revenue was BDT 24.9m, 27.8m and 29.0m in the first three quarters of FY2025, then BDT 64.1m, 73.4m and 76.1m in the first three quarters of FY2026 [3 p.2] [2 p.2] [16]. Year-on-year, Q1 FY2026 revenue was up 158%, Q2 up 164% and Q3 up 162%; quarter-on-quarter, Q3 FY2026 was 3.8% above Q2 FY2026 [16]. Quarterly profit after tax rose from BDT 16.7m (Q1) to BDT 18.8m (Q2) and BDT 20.4m (Q3), matching the reported quarterly EPS of BDT 0.17, 0.19 and 0.21 [10] [16].

A fourth-quarter anomaly in FY2025. Subtracting the nine-month figures from the audited FY2025 accounts gives Q4 FY2025 revenue of BDT 20.6m but gross income of BDT 21.2m, because audited full-year cost of sales (BDT 53.4m) was lower than the nine-month cost of sales already reported (BDT 53.9m) [1 p.55] [2 p.2]. Factory wages show the same pattern: BDT 22.7m in nine months against BDT 22.3m for the full year [2 p.10] [1 p.69]. The derived Q4 profit is BDT 10.9m (EPS BDT 0.11); DSE-announced EPS gives 0.27 - 0.15 = 0.12, a rounding difference [10]. The company told shareholders there was 'no significant variance' between the quarterly and annual statements [1 p.15].

Ratios: ROE of 2.2% in FY2025 after four loss years; asset turnover fell from 0.54x to 0.08x

Growth and margins over nine years. Revenue fell in six of the eight years from FY2018 to FY2025 and the FY2025 figure was 13% of FY2017's [16]. Gross margin ranged from 11.5% to 47.9%; it sat at 12-17% as an exporter and moved to 21.7% and 47.9% once revenue was a conversion fee with no material cost [16]. Operating margin was negative from FY2020 to FY2023 [16]. These margins are not comparable across the phases: a toll fee is closer to value added than to sales.

Returns. ROE (profit over average equity) was 5.9% in FY2018 and 2.0% in FY2019, negative in FY2020-FY2023, 0.07% in FY2024 and 2.2% in FY2025 [16]. Profit over twelve months to March 2026 of BDT 66.9m on equity of BDT 1,179m is a return of about 5.7% [16]. Asset turnover fell from 0.54x in FY2018 to 0.08x in FY2025 [16]: the asset base barely changed while revenue shrank.

Leverage and liquidity. Total liabilities were 6.5% of equity in FY2025 and the current ratio was 21.5x [16]. The current ratio is high because current assets are dominated by the frozen inventory and receivables discussed below; cash outside the People's Leasing deposit was BDT 31.9m at June 2025 and BDT 28.1m at March 2026 [16].

Payout. Cash dividends were 2% in FY2018, FY2020 and FY2022, 1% in FY2024 and 10% for FY2025 [11]. The FY2022 dividend was paid in a year with a loss of BDT 18.1m and the FY2024 dividend (BDT 6.9m paid) on a profit of BDT 0.9m [1 p.16] [1 p.66]. The FY2025 dividend went only to shareholders other than sponsors and directors, whose 36.75m shares were excluded; it cost BDT 61.3m against FY2025 profit of BDT 26.0m [10]. The 2025 annual report's growth table prints FY2024 as 'Nill' while DSE lists 1% [1 p.10] [11].

Peers: the smallest turnover of the three listed names compared and the highest gross margin, 38.5%

Peers on the same basis. The two listed plastics and packaging companies with operating filings for the same nine months are Sinobangla Industries and Bengal Windsor Thermoplastics, both operating names in the plastic products and packaging group [8 p.3] [9 p.3]. All three print a gross finance-cost line with other income shown separately: KBPPWBIL 'Financial expenses', Sinobangla 'Financial Expenses' and Bengal Windsor 'Finance costs'. All three are single-company (standalone) statements.

Of the three, KBPPWBIL had the smallest turnover (BDT 213.6m against BDT 2,138.5m and BDT 787.9m), the highest gross margin (38.5% against 10.7% and 17.4%) and the lowest finance cost relative to turnover (0.6% against 3.6% and 3.4%) [16]. Its turnover grew 161%; Sinobangla's fell 2.1% and Bengal Windsor's rose 13.1% [16]. The margin gap reflects that 31% of KBPPWBIL's nine-month revenue was a conversion fee with no material cost, so it is not a like-for-like measure of selling margins.

Balance sheet: BDT 690m, 58.5% of equity, sits in stock, bills and a deposit unchanged since 2019-2021

Where the assets are. At 31-Mar-2026 total assets were BDT 1,269m: property, plant and equipment BDT 423.8m, inventories BDT 618.2m, trade receivables BDT 141.9m, cash BDT 58.1m and a new BDT 12.1m investment in listed shares [2 p.1]. Three items in that list are the ones the auditors keep flagging.

Inventory. Raw materials of BDT 553.3m and finished goods of BDT 44.1m were carried at the same value from June 2021 to June 2025 [1 p.64] [1 p.47]. The FY2025 auditor could not confirm their quantity or value, found no stock register, and could not establish whether the stock belongs to KBPPWBIL or to the sister company operating in the same premises [1 p.47]. The FY2023 auditor went further: after a physical count it put the shortfall at BDT 377.9m of raw materials and BDT 29.2m of finished goods, BDT 407.0m in total, and said net assets and equity were overstated by that amount [5 p.46]. The company did not book that shortfall. The finished goods are export bags from cancelled orders; the FY2025 auditor called recovery 'very remote' [1 p.48]. In FY2026 raw materials rose to BDT 573.9m as new purchases for local sales were added [2 p.7].

Receivables. Export bills receivable of BDT 62.2m have been carried since 2020-21 without movement and without provision, and management gave the auditor no follow-up correspondence [1 p.47]. The rest of receivables is owed by Khan Brothers Bag Industries: BDT 45.2m at June 2024, BDT 84.4m at June 2025 (about 301 days of FY2025 revenue) and BDT 79.7m at March 2026 [1 p.64] [2 p.7] [16]. The receivables note still calls all of it 'considered good' and 'fully secured' [1 p.64].

Cash. BDT 30m of the cash line is a fixed deposit with People's Leasing and Financial Services, a non-bank lender whose earlier board misappropriated depositors' money, as the directors' report itself says [1 p.16]. The confirmed balance is BDT 35.7m but interest has not been accrued since July 2019, and no impairment has been booked [1 p.47]. Management's position is that the government-reconstituted board promised gradual refunds in November 2022 [1 p.16].

Adding it up. The unmoved inventory, the old export bills and the People's Leasing deposit total BDT 689.7m, 58.5% of March 2026 equity [16]. Equity without those three items would be BDT 489m, BDT 4.99 a share, against stated NAV of BDT 12.02 [16] [2 p.1]. That is arithmetic on the reported figures, not an estimate of what the items are worth. The revaluation reserve adds another BDT 88.3m, so NAV excluding revaluation was BDT 11.12 [2 p.1] [16].

Liabilities. The only bank debt is the Mutual Trust Bank machinery loan, down to BDT 4.4m [2 p.9]. Trade payables were nil at June 2025 [1 p.54]. The largest liabilities are taxes: the provision for taxation of BDT 38.9m and deferred tax of BDT 37.0m at March 2026 [2 p.1]. The auditor's unprovided VAT (BDT 15.4m for FY2025, BDT 11.2m for FY2024) and withholding tax (BDT 7.7m for FY2025) are not on the balance sheet [1 p.48] [4 p.47]. The capital-commitment and contingent-claim notes report nothing [1 p.73].

Audit: a disclaimer for FY2022 and three qualified opinions; the FY2025 auditor lists ten matters

Five audit opinions. The FY2021 opinion was unmodified [7 p.44]. For FY2022 the auditor issued a disclaimer of opinion: it could not obtain enough evidence on the inventory, the finished goods and the People's Leasing deposit to form any opinion [6 p.46]. FY2023, FY2024 and FY2025 were qualified [5 p.46] [4 p.46] [1 p.47]. DSE published the FY2024 and FY2025 qualifications as news on 21-Nov-2024 and 22-Dec-2025 [10] [12].

The FY2025 basis. Islam Aftab Kamrul & Co. listed ten matters [1 p.47] [1 p.48]: the unmoved inventory; the export bills; the People's Leasing deposit; unpaid VAT and withholding tax on toll income; factory and operating expenses paid by the sister company in cash; going-concern doubts with no written management plan; EPS and NAV per share that do not reflect the provisions it considered necessary; books of account not maintained as section 181 of the Companies Act requires; no asset register and BDT 13.0m of land-development additions without supporting documents; and salaries paid in cash in breach of section 55 of the Income Tax Act 2023. Paragraph 7 refers to a 'basis for adverse opinion', although the opinion is headed as qualified [1 p.48].

What management says. The directors' report states that proper books have been kept, that internal control is 'sound in design', and that there is 'no doubt, whatsoever' about going concern [1 p.15]. Note 2.25 says there were no related-party transactions other than director payments [1 p.63], while note 20 says all FY2025 revenue came under the sub-contract with Khan Brothers Bag Industries [1 p.68], and note 31 on related parties gives a heading with no table [1 p.73]. The financial-risk note says 'the entire part of the receivables are related to export of goods' [1 p.74], while 57.6% of June 2025 receivables were owed by the sister company [16].

Cash flow in that light. Operating cash flow was BDT 7.5m in FY2024, BDT 26.3m in FY2025 and BDT 78.4m in the nine months to March 2026 [1 p.57] [2 p.4]. The FY2025 auditor says no toll income was received through the banking channel and that expenses were paid by the sister company in cash [1 p.48], so the direct-method cash flow statement records flows that partly did not pass through KBPPWBIL's bank accounts. Nine-month collections of BDT 219.7m exceeded revenue of BDT 213.6m, and receivables from the sister company fell by BDT 4.7m [2 p.4] [2 p.7].

Governance: sponsors hold 30.13%; no capex or expansion approval in 24 months of DSE notices

Ownership. At 30-Jun-2025 five sponsors held 30.13% and two other directors 7.34%, together 37.47%; institutions held 2.72% and the general public 59.65% [1 p.66]. By 31-Aug-2026 the sponsor/director line on DSE was 30.13% and institutions 11.76%; at 30-Sep-2026 it was 30.13% sponsors/directors, 13.26% institutions and 56.61% public [11]. The number of shareholders rose from 1,925 to 3,291 in FY2025 [1 p.66].

Board decisions in the last 24 months (DSE news, criteria 3, Oct-2024 to Oct-2026) [10]. On 10-Nov-2024 the company said it had cancelled a memorandum of understanding with BSB Cambrian Education Group and signed a new one with Beacon Group, effective 4-Nov-2024; the notice does not say what the MOU covers, and we found no later notice on it (passed, outcome unknown). On 15-Dec-2024 it answered a DSE query about a social-media post claiming the factory had been shut for five or six years, saying production 'never stopped' and was being done 'under trolling [toll] system with another sister concern'. On 26-Aug-2025 the board decided to start direct local sales. On 21-Oct-2025 it approved the FY2025 accounts and recommended the 10% cash dividend for non-sponsor shareholders. The sweep found no board approval of capital expenditure, a new plant or a share issue in the period; note 32.01 reports no capital commitments at June 2025 [1 p.73].

Regulatory record. DSE queried unusual price and volume moves in January 2025 and the company replied that there was no undisclosed price-sensitive information [10]. ARGUS Credit Rating Services rated the company BBB- long term and ST-3 short term (stable) in March 2025 [10]. The share moved to DSE's A category on 19-Jan-2026 after the FY2025 dividend was paid [10]. The board meeting for Q1 FY2026 was moved from 23-Oct-2025 to 11-Nov-2025 [10].

Market data: 47x trailing EPS and 2.7x stated book at BDT 32.1

Market facts. The share closed at BDT 32.1 on 29-Oct-2026, giving a market capitalisation of BDT 3,148m [15] [16]. It closed at BDT 110.70 on 30-Jun-2025 [1 p.66], peaked at a close of BDT 163.3 on 18-Sep-2025 and has a DSE 52-week range of BDT 28.10-96.00 [15] [11]. On twelve-month EPS of BDT 0.68 the P/E is 47.1x; on March 2026 NAV of BDT 12.02 the P/B is 2.67x, and 2.89x NAV excluding revaluation [16]. The FY2025 dividend of BDT 1.00 a share to general shareholders is 3.1% of the price [16]. These are facts about the price, with no view on it.

What's next: FY2026 accounts and audit opinion, inferred for November-December 2026

Already known: the nine-month FY2026 results (EPS BDT 0.57) were published on 30-Apr-2026 [10]. Nothing after that date appears in the DSE archive up to 31-Oct-2026, including no board-meeting notice for the FY2026 annual accounts [10]. The items below are scheduled or inferred from the company's past timing, with the line each one moves.

LDC graduation. The UN General Assembly adopted on 29-Oct-2026 the move of Bangladesh's graduation from 24-Nov-2026 to 24-Nov-2029 [13] [14]. KBPPWBIL has had no export revenue since 2022 [10], so the change matters only if exports restart; the company says management 'is trying to regain the export market' [1 p.15].

Risks: write-downs of old balances and unpaid taxes are the largest items in the filings

Each risk below is tied to the line it moves and to the evidence in the filings.

Key questions: provisions, the durability of local sales, taxes and related-party disclosure

FAQ

What does Khan Brothers PP Woven Bag Industries make?

PP woven bags for cement, fertiliser, food grains, feed, sand and chemicals, with stated capacity of 69.5m bags a year [1 p.10].

Why did revenue fall from FY2017 to FY2024?

Export orders collapsed; the company says exports have been suspended since 2022 and it earned only toll fees from a sister company until local sales restarted in FY2026 [10] [1 p.15].

What were the nine-month FY2026 results?

Revenue BDT 213.6m (+161%), profit after tax BDT 55.9m and EPS BDT 0.57 against 0.15 [2 p.2].

Why is the audit opinion qualified?

Mainly unverified inventory of BDT 597.5m, export bills of BDT 62.2m and a BDT 30m People's Leasing deposit with no provision, plus unpaid VAT and incomplete books [1 p.47] [1 p.48].

Who received the FY2025 dividend?

Only shareholders other than sponsors and directors: 10% cash, BDT 61.3m in total [10].

Does the company have bank debt?

Only BDT 4.4m of a Mutual Trust Bank machinery loan at 31-Mar-2026 [2 p.9].

When are the FY2026 annual results due?

No date had been announced by 31-Oct-2026; past timing points to November-December 2026 (inferred) [10].

Sources

1. Khan Brothers PP Woven Bag Industries Ltd. Annual Report 2025 (year to 30-Jun-2025) · link · accessed 2026-10-31
2. Khan Brothers PP Woven Bag Industries Ltd. un-audited financial statements, nine months to 31-Mar-2026 · link · accessed 2026-10-31
3. Khan Brothers PP Woven Bag Industries Ltd. un-audited financial statements, six months to 31-Dec-2025 · link · accessed 2026-10-31
4. Khan Brothers PP Woven Bag Industries Ltd. Annual Report 2024 (year to 30-Jun-2024) · link · accessed 2026-10-31
5. Khan Brothers PP Woven Bag Industries Ltd. Annual Report 2023 (year to 30-Jun-2023) · link · accessed 2026-10-31
6. Khan Brothers PP Woven Bag Industries Ltd. Annual Report 2022 (year to 30-Jun-2022) · link · accessed 2026-10-31
7. Khan Brothers PP Woven Bag Industries Ltd. Annual Report 2021 (year to 30-Jun-2021; five-year data FY2017-FY2021) · link · accessed 2026-10-31
8. Sinobangla Industries Limited un-audited financial statements, nine months to 31-Mar-2026 · link · accessed 2026-10-31
9. Bengal Windsor Thermoplastics PLC un-audited financial statements, nine months to 31-Mar-2026 · link · accessed 2026-10-31
10. Dhaka Stock Exchange, KBPPWBIL company news archive (Oct-2024 to Oct-2026) · link · accessed 2026-10-31
11. Dhaka Stock Exchange, KBPPWBIL company page (shareholding, dividends, market data) · link · accessed 2026-10-31
12. Dhaka Stock Exchange, 'Qualified Opinion' paragraph of Khan Brothers PP Woven Bag Industries Ltd. for the year ended 30-Jun-2025 · link · accessed 2026-10-31
13. The Daily Star, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
14. The Business Standard, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
15. AnalystBro price data (TradingView feed): DSE:KBPPWBIL daily bars to 29-Oct-2026 · link · accessed 2026-10-31
16. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31