Matin Spinning Mills financial analysis: FY2026 EPS up 35% to BDT 6.36 on a wider yarn spread (Oct 2026)

Investment considerations: a captive DBL Group spinner with a wider spread, lower debt and 81% related-party sales

Matin Spinning Mills PLC makes cotton, synthetic, melange, slub, open-end and vortex yarn at Sardaganj, Kashimpur, in Gazipur. It was incorporated in 2002, became a public company in 2010 and listed on the Chittagong and Dhaka exchanges in March and April 2014 [1 p.12]. It is a DBL Group company: the chairman, Abdul Wahed, and the managing director, M. A. Jabbar, lead the family conglomerate, and the chairman sits on the boards of 26 other group companies, from Jinnat Knitwears and Flamingo Fashions to DBL Ceramics and DBL Pharmaceuticals [1 p.39] [1 p.40] [1 p.78]. The managing director describes the mill as a backward-linkage supplier to export garment makers, primarily within the DBL Group, which today meets less than half of the group's own yarn demand [1 p.63]. Installed capacity is 88,400 spindles, about 61 tonnes a day [1 p.12] [1 p.63].

The filings show no link to a Thermax group: every sister concern in the FY2025 related-party note is a DBL Group company [1 p.194], and the only Thermax entity found is Thermax Colour Cotton Ltd, a supplier with a BDT 1.3m expense advance at June 2023 that was nil by June 2024 [4 p.168]. This note therefore analyses the DBL Group relationship.

Three facts in the filings carry the investment case. First, this is a captive mill: 81% of FY2025 revenue was yarn sold to DBL Group garment and textile companies, and Jinnat Knitwears alone bought BDT 3,026m, 35% of sales [1 p.194] [13]. Volumes are therefore set by the group's garment orders more than by the open yarn market. Second, profit turns on the spread between the yarn price and the cotton price: the realised price was BDT 432 a kg in FY2025 and raw material BDT 283 per kg of output, a spread of BDT 149, the second-widest in ten years after FY2022's BDT 179 [1 p.70] [13]. Third, the balance sheet is less stretched than two years ago. Gross bank debt fell from BDT 5,880m at June 2024 to BDT 5,287m at March 2026, and operating cash flow turned from BDT -10.67 a share in FY2024 to BDT 11.67 in FY2025 [1 p.151] [2 p.2] [1 p.67].

Business: 88,400 spindles, four units, and revenue up 4.4x in ten years

How the mill makes money. Matin imports cotton and synthetic fibre, all of it bought abroad in FY2025 (BDT 5,985m of raw cotton imports, no local purchase) [1 p.195], spins it, and sells yarn to export knit and woven garment factories in Bangladesh. The sale counts as an export: the FY2025 FOB value of exports was USD 71.7m, equal to the whole BDT 8,752m of revenue [1 p.195]. So revenue is set in dollars, cotton is bought in dollars, and the taka moves both sides. What the mill keeps is the spread between the two, less energy, wages and interest.

Four units. The FY2025 capacity note splits the 88,400 spindles into the original MSML unit (39,600 spindles), a melange unit (18,240), a synthetic unit (15,440) and a special yarn unit (15,120) [1 p.194]. Utilisation ranged from 74.5% in the melange unit to 87.0% in the synthetic unit [1 p.194]. The special yarn project took most of the capital spending of FY2021-FY2022, BDT 980m of plant in FY2022 alone [1 p.71], and lifted installed spindles from 73,184 to 88,304 in FY2023 [1 p.69].

Ten years of growth. Yarn sold rose from 7.7m kg in FY2016 to 20.3m kg in FY2025, and revenue from BDT 2.0bn to BDT 8.8bn [3 p.58] [1 p.70]. Most of the volume came in two steps: the expansion to 73,184 spindles by FY2017, and the special-yarn and melange expansions to 88,304 by FY2023 [3 p.57] [1 p.69]. Between those steps volumes were flat, and in FY2020 they fell 5% when the mill was shut from 6 to 26 April 2020 for Covid-19 [3 p.58]. Profit has been far less steady than volume: EPS ranged from BDT 0.97 (FY2019) to BDT 10.79 (FY2022) [3 p.56] [1 p.67].

Utilisation has stayed in a narrow band, 74.7% to 84.5% over ten years [13]. It is set by group orders, power and the count mix rather than by spare demand: in FY2025 the company ran 79,805 of 88,400 spindles [1 p.69]. The drop from 84.5% to 79.3% in FY2025 came with a shift to coarser carded and open-end yarn, which raises kilos per spindle-hour but lowers the 28s-equivalent figure; actual output was almost unchanged at 20.0m kg [1 p.69] [1 p.186].

Line items: the spread widened to BDT 149 a kg and carried FY2025 profit up 130%

Revenue = kilos sold x realised price. In FY2025 kilos rose 2.0% and the realised price 6.7% to BDT 432, giving revenue growth of 8.8% [1 p.70] [1 p.71] [13]. The company credits the price [1 p.75]. Part of that is the taka: the dollar value of exports rose only 4.2%, from USD 68.8m to USD 71.7m, so roughly half of the revenue growth was the weaker taka [1 p.195] [13].

The spread is the profit engine. Over ten years it ranged from BDT 90 a kg (FY2019) to BDT 179 (FY2022) [13]. Each BDT 1 a kg on 20.0m kg of output is about BDT 20m of gross profit, against FY2025 profit before tax of BDT 579m [1 p.152] [13]. In FY2023 and FY2024 cotton costs rose faster than yarn prices: raw material per kg climbed from BDT 220 to BDT 289 while the price rose only from BDT 399 to BDT 405, and the spread shrank by BDT 63 [13]. FY2025 reversed part of that, with raw material per kg down 2.3% and price up 6.7% [1 p.69] [1 p.71].

The mix moved toward carded, synthetic and open-end yarn in FY2025. Combed yarn, previously the largest line, fell from 40% to 26% of revenue, while carded yarn doubled to BDT 1,475m and synthetic rose to BDT 2,187m [1 p.186] [13]. The filings give revenue and kilos by product but not cost by product, so the margin effect of the mix cannot be separated from the cotton-price effect.

Cost of sales. Raw material is about three-quarters of the unit cost: BDT 282.90 of BDT 366.64 a kg in FY2025 [1 p.70]. The mill bought 28.7m kg of fibre and consumed 27.2m kg to produce 20.0m kg of yarn, about 1.36 kg of fibre per kg of yarn including waste [1 p.187]. Closing raw-material stock was 7.1m kg, BDT 1,855m, about three months of consumption [1 p.187]. That stock is what makes the spread lag the cotton market: yarn is priced on current cotton, but cost of sales reflects cotton bought months earlier.

Wages and depreciation. Wages and allowances in cost of sales rose 20.7% to BDT 429m in FY2025, BDT 21.44 a kg against BDT 17.64 [1 p.187] [13]. Factory depreciation was BDT 398m [1 p.187], and will rise because the FY2025 revaluation added BDT 1,319m to land and buildings [1 p.154]; depreciation on revalued assets is already charged to profit and offset by a transfer within equity [1 p.154].

Opex, other income and tax. Administrative expenses were BDT 318m (3.6% of revenue) and distribution BDT 13m [1 p.152]. Finance cost is discussed below. Other income is small but volatile: BDT 30m in FY2024, BDT 15m in FY2025, and in the nine months to March a swing from a BDT 45m loss to a BDT 1m gain [1 p.152] [2 p.3]. The effective tax rate was 20.9% in FY2025 and 36.1% in the nine months of FY2026, the latter lifted by a BDT 56m deferred tax charge [2 p.3] [13].

Gas and power: grid electricity is now 71% of energy cost, gas only 10%

Fuel and power is the second-largest cost after fibre: BDT 694m in FY2025, BDT 34.64 a kg and 7.9% of sales [1 p.69] [1 p.70] [13]. The note to cost of sales shows how the mill is powered now. Grid electricity cost BDT 490m, generator fuel BDT 133m and gas BDT 70m [1 p.187]. Electricity was 71% of energy cost and gas only 10% [13].

The grid connection matters. The company says that from August 2024 it draws power from a newly installed 15MVA 33/11kV and a 4MVA substation with a 10MW sanctioned load from Gazipur Palli Bidyut Samiti-1 [1 p.71]. It also still runs gas generators carried at BDT 602m of cost [1 p.197]. Energy cost per kg went from BDT 38.07 in FY2023, the year captive gas prices nearly doubled, down to BDT 29.00 in FY2024 and back up to BDT 34.64 in FY2025 [1 p.70]. The Business Standard reported that the government raised the captive-power gas tariff from Tk 16 to Tk 30 a cubic metre and the large-industry tariff from Tk 11.98 to Tk 30 from 1 February 2023 [9].

Generator fuel rose 40% in FY2025, to BDT 133m [1 p.187]. Some of the fuel comes from inside the group: the related-party note shows BDT 159m of fuel and lubricant bought from DBL Distribution Ltd in FY2025, with BDT 96m owed to it at year end [1 p.194]. History sensitivity: each BDT 1 a kg of energy cost on FY2025 output is about BDT 20m, so the FY2025 increase of BDT 5.64 a kg cost about BDT 113m of gross profit [1 p.70] [13].

FY2026: EPS up 35% to BDT 6.36, with BDT 3.01 earned in the fourth quarter

The board met on 18 October 2026 on the FY2026 accounts (year to 30 June 2026) and declared the dividend the next day [6] but is not yet in our filings corpus. The DSE company page shows FY2026 EPS of BDT 6.36, against BDT 4.70 for FY2025 [5]. Quarterly EPS was BDT 1.09, 1.02 and 1.24, so the nine months earned BDT 3.35 and the implied fourth quarter BDT 3.01, nearly three times the BDT 1.04 of the same quarter a year earlier [5] [13]. Until the annual report is filed, the drivers of that fourth quarter cannot be read from a filing.

The nine-month statements to March 2026 show a business that was steady at the operating level. Revenue was flat at BDT 6,522m (+0.3%), gross margin improved to 16.5% from 15.9% and operating profit rose 4.8% [2 p.3] [13]. Finance cost fell 2.7% as debt came down, and profit before tax rose 20.6% to BDT 510m [2 p.3]. Net profit still fell 8.6%, to BDT 326m, because tax rose from BDT 66m to BDT 184m, including a BDT 56m deferred tax charge against a BDT 16m credit a year earlier [2 p.3]. The third quarter alone was better than a year earlier: revenue up 5.3% and profit up 17.5% [2 p.3] [13].

DBL Group: 81% of revenue goes to sister companies (not the Thermax group)

Matin's customer list is mostly its own group. In FY2025 it sold BDT 3,026m of yarn to Jinnat Knitwears, BDT 1,898m to Flamingo Fashions, BDT 1,595m to Mawna Fashions, BDT 345m to Hamza Textiles and smaller amounts to Jinnat Fashions, Dulal Brothers and DB Trims [1 p.194]. The total, BDT 7,054m, was 80.6% of revenue [13]. The auditor, A. Qasem & Co., states that 81% of the company's goods are sold to group companies and lists revenue recognition as a key audit matter because of the risk that intra-group sales are priced or recorded wrongly [1 p.147]. The opinion itself is unqualified [1 p.146].

Group receivables fell. Balances owed by group yarn customers were BDT 1,617m at June 2024 and BDT 1,133m at June 2025, 67% and 58% of trade receivables [1 p.194] [13]. Jinnat Knitwears is the exception: its balance rose to BDT 779m, about three months of its purchases [1 p.194] [13]. Receivable days overall fell from 110 to 81 in FY2025, then rose to 91 at March 2026 [13].

What runs the other way. Matin buys fuel from DBL Distribution (BDT 159m), fibre dyeing from Color City (BDT 24m) and, new in FY2025, fibre from DBL Textile Recycling (BDT 75m), to which it also sold BDT 57m of waste [1 p.194]. Directors' remuneration was BDT 12.0m plus BDT 1.0m of meeting fees in both years [1 p.194]. The note gives totals but not prices or terms, so a reader cannot test whether group sales are made at the same price as the 19% sold outside the group.

Why this matters for a minority holder. A captive outlet lowers volume risk: Matin does not need to win orders in the open yarn market, and the group needs more yarn than Matin makes [1 p.63]. The cost is that the price, the credit terms and the timing of payment are set between companies with the same controlling family, and sponsors hold only 32.72% of Matin [5]. The FY2025 numbers show the arrangement working in shareholders' favour on receivables, which fell, and on price, which rose faster than cotton [13].

Ratios: ROE above 10% in only two of nine years; cash flow swings with cotton stock

Margins follow the spread. Gross margin ranged from 8.7% (FY2019) to 26.9% (FY2022); the ten-year median is about 14.9%-15.0% [13]. Net margin ranged from 2.2% to 17.5% [13].

Returns are low for a full mill. ROE on average equity was 7.4% in FY2025 and above 10% only in FY2021 (12.2%) and FY2022 (18.9%) [13]. Part of the reason is the revaluation reserve, which lifts equity without lifting profit: excluding it, FY2025 NAV was BDT 43.44 a share instead of BDT 69.89 [1 p.67] [13]. The company's own ROCE was 13% in FY2025 and 9% in FY2024 [1 p.67].

Working capital is heavy. Inventory including materials in transit was 190 days of cost of sales at June 2025 and receivables 81 days of revenue [13]. Operating cash flow per share was negative in FY2024 (BDT -10.67) when inventories rose by BDT 925m and receivables by BDT 975m, and strongly positive in FY2025 (BDT 11.67) when receivables fell [1 p.195] [1 p.67]. Over FY2021-FY2025 cash conversion averaged well below one in the growth years [13].

Asset turnover has drifted down: the company reports 0.66x in FY2025 against about 1x in FY2021-FY2022 [1 p.67], because total assets grew faster than sales after the expansions and the revaluation. Assets to equity were 2.04x in FY2025 [13].

Debt: BDT 5.29bn of mostly cotton finance, cover 2.9x, and a revaluation that lifts NAV

Debt is mostly cotton finance. At June 2025 bank debt was BDT 5,718m: BDT 4,792m of EDF and UPAS loans for raw cotton, BDT 917m of long-term loans including the current portion, and BDT 10m of working-capital loan [1 p.151] [1 p.181] [1 p.185]. The HSBC facilities alone have limits of BDT 3,000m each for EDF and UPAS; the UPAS rate is SOFR plus 1.91% [1 p.181]. EDF and UPAS interest rose 73% to BDT 280m in FY2025 and became 72% of finance cost [1 p.189] [13].

Interest cover. Operating profit covered finance cost 1.97x in FY2024, 2.53x in FY2025 and 2.90x in the nine months to March 2026 [13]. The company's own ratio was 31x in FY2022 and 22x in FY2021, before the cotton loans grew and rates rose [1 p.67]. Finance cost per taka of average debt was 6.7% in FY2025 [13]. History sensitivity: each 1pp on FY2025's BDT 5,718m of bank debt is about BDT 57m a year of interest, 10% of FY2025 profit before tax [13].

Security and guarantees. The loan notes list personal guarantees of the sponsor directors, including Abdul Wahed, as security for EDF lines [1 p.184]. Inventory is the other side of the cotton debt: inventories and materials in transit were BDT 3,865m at June 2025 against BDT 4,792m of EDF/UPAS [1 p.151] [1 p.181].

The revaluation. In FY2025 an external valuer revalued land, land development, factory buildings and godowns, adding BDT 1,319m to equity before BDT 99m of deferred tax [1 p.146] [1 p.154]. NAV per share went from BDT 57.68 to BDT 69.89, but NAV without the revaluation reserve barely moved, BDT 42.85 to BDT 43.44 [1 p.67]. Equity at historical cost is the better base for debt ratios and for comparing with Square Textiles, which carries no revaluation reserve [7 p.74].

Peers: highest gross margin and price per kg, lowest ROE, debt similar once revaluation is stripped out

The two listed spinners closest in model are Square Textiles (SQUARETEXT) and Malek Spinning (MALEKSPIN). Both file consolidated accounts with subsidiaries (Square Texcom; Salek Textile, J.M. Fabrics) [7 p.74] [8 p.12], while Matin has none, so the table puts each company's own FY2025 statements side by side and adds the spinning-only figures each directors' report gives. All three have June year ends.

What the table shows. Matin had the highest gross margin of the three in FY2025 (15.0% against 13.3% and 11.7%) but the lowest net margin and ROE, because finance cost took 4.4% of revenue and the revaluation inflates its equity [13]. Its realised price per kg was the highest, consistent with its synthetic, melange and special-yarn mix [1 p.186]; Square sells far more kilos of mainstream yarn [7 p.23]. On debt, Matin and Malek look alike at about 0.8x equity, and all three converge at 1.1x-1.4x once revaluation reserves are removed [13].

Exhibit 22 lists each company's P/E and P/B at the 29-Oct-2026 close for reference [12] [13].

Dividends: cash every year since 2014, and 45% cash plus 10% stock for FY2026

The dividend record. Matin has paid a cash dividend for every year since listing: 25% for FY2014, 27% for FY2015, 15-23% through FY2020, 40-50% in FY2021-FY2024 and 35% for FY2025 [5]. For FY2026 the board declared 45% cash and 10% stock on 19 October 2026, record date 12 November 2026, subject to the AGM on 10 December 2026 [6]. It is the first stock dividend in the DSE dividend history, which starts in 2014 [5]; it will raise the share count from 97.49m to about 107.24m [13].

Payout. The cash payout was 74% of EPS in FY2025 and 71% in FY2026; it exceeded 100% in FY2019 (155%) and FY2024 (245%), when the board kept the dividend despite weak earnings [13]. Over FY2021-FY2025 free cash flow summed to BDT -14.43 a share against BDT 19.80 a share of dividends paid, so dividends exceeded free cash flow over the period [1 p.67] [1 p.71] [13]. At BDT 83.4 the FY2026 cash dividend is a yield of 5.4% [12] [13].

Ownership. Sponsors and directors held 32.72% at September 2026, institutions 42.06% and the public 25.22%; there were no foreign holders [5]. Institutions sold down from 45.07% at June 2025, and the public share rose [5]. The company is in the DSE's A category [5].

Board and audit. Mr Md. Abdus Salam resigned as independent director and audit committee chair, accepted by the board on 16 June 2025; Ms Maria Howlader FCA was appointed on 11 September 2025, subject to shareholder approval [1 p.78]. The FY2025 auditor, A. Qasem & Co., gave an unqualified opinion with three key audit matters: the PPE revaluation, revenue from group companies, and inventories [1 p.146] [1 p.147]. The board met on 23 October 2025 to approve the FY2025 accounts and recommend 35% cash [1 p.109].

What's next: Q1 FY2027 on 3 Nov, the AGM on 10 Dec, the annual report, and a 2029 LDC date

LDC graduation. The UN General Assembly adopted Bangladesh's move from 24 November 2026 to 24 November 2029 on 29 October 2026 in New York, early on 30 October Dhaka time, as reported by both The Daily Star and The Business Standard [10] [11]. For Matin the effect is indirect and runs through revenue volume: its customers are export garment makers, mainly in the DBL Group [1 p.63]. Three more years of current trade preferences delay any change to their orders. After graduation, stricter rules of origin in some markets would favour locally spun yarn over imported yarn; that is a general industry point, not one the company makes in its filings.

Rates. Most of Matin's debt is EDF and UPAS cotton finance priced off Bangladesh Bank guidelines or dollar benchmarks such as SOFR [1 p.181] [1 p.184]. A change in those benchmarks moves the finance cost line within months, because the loans roll every 180 days [1 p.181]. Finance cost in the nine months to March 2026 was already 2.7% lower than a year earlier [2 p.3].

Energy. The grid connection from August 2024 shifts the cost base from gas to electricity [1 p.71]. Grid tariffs therefore matter more to the cost of sales line than gas tariffs; generator fuel, bought partly from DBL Distribution, is the swing item [1 p.187] [1 p.194].

The stock dividend. A 10% bonus issue adds about 9.7m shares [13]. It does not change earnings, but it lowers EPS and NAV per share by about 9% from FY2027 and keeps the retained cash in the company, where it can reduce debt.

Risks: the spread, the group customer and the cotton loans matter most

Each risk below is tied to the line it moves, with FY2025 history for scale.

Two risks stand out. The first is concentration: four DBL Group customers bought about 78% of revenue in FY2025 [1 p.194] [13], so the mill's volume and its price are only as independent as the group chooses. The second is the combination of three months of cotton stock with short-term cotton loans: a fall in yarn prices hits margin while the loans remain [1 p.187] [1 p.181].

Key questions: the Q4 jump, the spread and the group relationship decide returns

In one line: FY2026 was the second-best year in the company's history by EPS [5] [1 p.67]. Whether it repeats depends on the spread and on what the DBL Group buys and pays.

FAQ

When does Matin Spinning Mills' financial year end?

On 30 June. FY2025 ended 30-Jun-2025 and FY2026 on 30-Jun-2026 [1 p.151] [5].

What was Matin Spinning's EPS for FY2026?

BDT 6.36 as shown on the DSE, against BDT 4.70 in FY2025 [5] [1 p.152]. The FY2026 annual report is not yet in our corpus.

What dividend did Matin Spinning declare for FY2026?

45% cash (BDT 4.50 a share) and 10% stock; record date 12-Nov-2026, AGM 10-Dec-2026 [6].

Which business group owns Matin Spinning Mills?

The DBL Group. Its chairman and managing director lead DBL, and the related-party customers are DBL companies [1 p.40] [1 p.194]. The filings show no Thermax group link; Thermax Colour Cotton appears only as a past supplier [4 p.168].

How many spindles does Matin Spinning have?

88,400 installed, 79,805 in operation in FY2025, at 79.3% utilisation [1 p.69].

How much debt does Matin Spinning have?

Bank debt of BDT 5,287m and cash of BDT 448m at 31-Mar-2026 [2 p.2].

Does LDC graduation affect Matin Spinning?

Indirectly, through its garment customers. Graduation was moved to 24-Nov-2029 on 29-Oct-2026 [10] [11].

Sources

1. Matin Spinning Mills PLC Annual Report 2024-25 (year to 30-Jun-2025) · link · accessed 2026-10-31
2. Matin Spinning Mills PLC unaudited third-quarter financial statements, nine months to 31-Mar-2026 · link · accessed 2026-10-31
3. Matin Spinning Mills Limited Annual Report 2019-20 (five-year data FY2016-FY2020) · link · accessed 2026-10-31
4. Matin Spinning Mills PLC Annual Report 2023-24 · link · accessed 2026-10-31
5. Dhaka Stock Exchange, Matin Spinning Mills PLC company page (FY2026 quarterly and annual EPS, dividend history, shareholding, loan status), accessed 31-Oct-2026 · link · accessed 2026-10-31
6. DSE announcements via AnalystBro events feed: FY2026 dividend declared 19-Oct-2026 (45% cash, 10% stock), record date 12-Nov-2026, AGM 10-Dec-2026, Q1 FY2027 board meeting 3-Nov-2026 · link · accessed 2026-10-31
7. Square Textiles PLC Annual Report 2024-25 (consolidated statements; standalone directors' report) · link · accessed 2026-10-31
8. Malek Spinning Mills PLC annual report, year to 30-Jun-2025 (consolidated statements; parent directors' report) · link · accessed 2026-10-31
9. The Business Standard, gas tariff for captive power and industry raised from 1-Feb-2023 (18-Jan-2023) · 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 before LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
12. AnalystBro price data (TradingView feed): DSE:MATINSPINN, DSE:SQUARETEXT, DSE:MALEKSPIN bars to 29-Oct-2026 · link · accessed 2026-10-31
13. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31