Monospool Bangladesh financial analysis: merger-led growth, 3.2x debt to equity and BDT 3bn unfinished capex (Oct 2026)

Investment considerations: merger-led growth to BDT 1.75bn of sales, carried on borrowings of 3.2x equity

Monospool Bangladesh PLC (formerly Bangladesh Monospool Paper Manufacturing Company Ltd.) describes its business as converting and printing paper and paper products: computer and photocopy paper, cheque books and other security products, exercise books (khata), ATM rolls and, since its merger with Pearl Paper & Board Mills Ltd. in February 2024, newsprint, cartridge and offset paper from Pearl's mill [1 p.13] [6 p.42]. The factory is at Sreerampur, Dhamrai, and the company is part of the Magura Group, whose holding company Magura Group PLC owned 18.7% of the shares at June 2025 [1 p.13] [1 p.28]. Revenue was BDT 1,748m in FY2025 and BDT 1,597m in the nine months to March 2026 [1 p.10] [2 p.4].

The merger changed almost every number. Total assets rose from BDT 1.8bn (June 2023) to BDT 6.1bn (June 2024), borrowings from BDT 1,205m to BDT 4,344m, and capital work-in-progress from BDT 29m to BDT 2,708m, of which BDT 2,601m came across from Pearl [6 p.93] [6 p.104] [19]. The paid-up capital rose to BDT 341m as 23.8m new shares were issued to Pearl's shareholders at 0.4 Monospool share for each Pearl share [1 p.28]. Profit grew, but more slowly than the balance sheet: profit after tax was BDT 128m in FY2025 against BDT 78m in FY2023, and ROE on average equity fell from 17.0% to 8.6% [19].

Business: a paper converter that became a mill through the 2024 Pearl Paper merger

Monospool was incorporated on 23 January 1988 and listed in 1989 [1 p.13]. It was moved to the over-the-counter market in 2009 after losses and returned to the DSE main board in July 2021, as The Business Standard reported in March 2023 [14]. In the five years to FY2021 it was a small converter of paper: revenue peaked at BDT 644m in FY2019 and fell to BDT 300m in FY2021 [9 p.26]. EPS of BDT 22.14 in FY2019 was on only 3.05m shares; the share base later grew through bonus issues and the merger, so per-share history is not comparable without restatement [9 p.26] [6 p.21]. On today's 39.22m shares, profit per share was BDT 1.72 in FY2019 and BDT 3.27 in FY2025 [19].

The merger. The board approved the amalgamation with Pearl Paper & Board Mills, a Magura Group mill making offset and white writing paper, in March 2023, subject to court approval [13]. Pearl had been Monospool's sponsor and sold its 218,525 Monospool shares before the merger, with permission from the securities regulator to repay debt, according to the same newspaper [14]. The High Court approved the scheme on 19-Oct-2023 and BSEC gave consent on 30-Jan-2024 [6 p.88]; the merger took effect in February 2024 [6 p.42]. Pearl's shareholders received 23.78m Monospool shares for Pearl's paid-up capital of BDT 594m (0.4:1), and the BDT 357m difference was booked as a capital reserve [1 p.28].

What came across. Pearl brought PPE at a gross cost of BDT 960m, capital work-in-progress of BDT 2,601m (plant and machinery BDT 1,281m, buildings BDT 1,427m by June 2024), inventory of BDT 482m of raw material and BDT 107m of finished goods, receivables of BDT 279m and advances of BDT 153m [6 p.104] [6 p.120] [6 p.105] [6 p.109]. It also brought its lenders: the NBFI term loans from Phoenix Finance and Investments and Premier Leasing and Finance appear in the FY2025 loan note, totalling BDT 1,895m [1 p.30] [1 p.31]. The auditor noted in FY2024 that the merger followed the court-approved scheme rather than IFRS 3's fair-value measurement of the acquired assets and liabilities [6 p.88].

Products and customers. In FY2025 newsprint, cartridge, KPM, roll and offset paper made up 56.1% of revenue; photocopy and recycled paper 25.6%; cheque books and other security products BDT 124m; computer paper BDT 113m; khata BDT 71m; ATM and till rolls BDT 12m [1 p.35]. The auditor says all revenue is from sales to local customers [1 p.4]; there are no export sales, so the export cash incentive and its phase-out do not touch the revenue line. The directors' report lists security paper, OMR forms and tabulation sheets for public and board examinations among its products [6 p.42], and the company told DSE in January 2025 that it had paid suppliers in advance to meet orders from the Education Board, Palli Biddyut Samity, banks and others [12]. The filings do not give a customer split, tonnes sold or prices, so volume and realisation per tonne cannot be measured.

Line items: mill paper added BDT 657m of sales in FY2025; financial expense took 61% of operating profit

Revenue. FY2025 revenue rose 63.1% to BDT 1,748m [1 p.10]. Almost all of the increase came from the mill line: newsprint and offset paper rose by BDT 657m, while all other products together went from BDT 748m to BDT 767m, up 2.5% [1 p.35] [19]. FY2024 contained Pearl only from February, so FY2025 is the first full year of the combined business; the non-mill products had grown 13.8% in FY2024 [6 p.120]. In FY2026 to date, revenue was BDT 479m in Q1 (down 6.3%), BDT 561m in Q2 (up 23.4%) and BDT 558m in Q3 (up 10.4%) [4 p.3] [3 p.4] [2 p.4].

Cost of goods sold. Raw materials consumed were BDT 1,071m in FY2025, 61.3% of revenue, against 56.3% in FY2023 [1 p.35] [6 p.120]. Purchases were BDT 1,127m [1 p.35]. The notes do not split pulp, waste paper and finished paper bought for conversion, or imported against local. Factory overhead rose from BDT 47m (FY2023) to BDT 216m (FY2025), and the reason is energy: electricity went from BDT 0.8m to BDT 102.5m and gas from nil to BDT 49.2m, which is what running a paper machine rather than converters costs [6 p.120] [1 p.35]. Energy was 8.7% of FY2025 revenue [19].

Gross margin. The mix change explains the margin path: 40.4% in FY2023, 32.3% in FY2024 and 27.6% in FY2025 [19]. Since then it has been steady at 27.5%-29.5% a quarter in FY2026 [19]. The one weak quarter was Q4 FY2025, derived from the annual and nine-month statements: revenue BDT 278m, gross margin 25.8% and profit after tax BDT 10.5m [1 p.10] [5 p.4] [19]. The filings do not explain the April-June 2025 shortfall.

Operating expenses are small and falling as a share of sales: administrative plus selling and distribution costs were BDT 59m in FY2025, 3.4% of revenue, against 9.8% in FY2020 [1 p.10] [19]. In the nine months to March 2026 they fell 23.6% to BDT 34.6m [2 p.4]. Salaries are the largest item (BDT 20.3m administrative and BDT 24.7m selling in FY2025) [1 p.36].

Financial expense is the line that decides profit. It was BDT 259m in FY2025, up 52%: interest to Phoenix Finance BDT 129m, Islami Bank BDT 86m and Social Islami Bank BDT 43m [1 p.37]. That is 14.8% of revenue and 61.1% of operating profit [19]. In the nine months to March 2026 it rose another 23% to BDT 254.6m, so that a 13.9% rise in operating profit became only a 2.9% rise in profit after tax [2 p.4]. History-based sensitivity: on FY2025 borrowings of BDT 4,905m, each 1pp of interest rate is about BDT 49m a year, 31% of FY2025 profit before tax [19].

Tax. Current tax is 22.5% of taxable profit, with a 1% minimum tax on gross receipts that has not bitten because the 22.5% charge was higher [1 p.37]. The effective rate was 19.1% in FY2025 and 10.7% in FY2024, when a BDT 15.6m deferred tax credit lowered it [1 p.10] [19]. Other income is negligible (BDT 1.7m in FY2025) [1 p.37].

Ratios: ROE fell from 17% to 9% after the merger; interest cover stayed at 1.17-1.70x

Growth. Revenue fell in FY2020 and FY2021 (to BDT 300m), more than doubled in FY2022 to BDT 664m, and has risen every year since [6 p.21] [19]. Over the nine years FY2017-FY2025 revenue grew 21.6% a year and profit after tax 16.2% a year [19], but FY2024-FY2025 growth is mostly acquired, and the per-share numbers fell because 23.8m shares were issued for Pearl [1 p.28].

Margins. Gross margin ranged from 27.6% to 52.8% over FY2017-FY2025 and was at the bottom of that range in FY2025 [19]. Net margin ranged from 3.8% to 11.4%; it was 7.3% in FY2025 [19].

Returns. ROE on average equity was 20-21% in FY2018-FY2019 on a small equity base, fell to 3.0-4.5% in FY2020-FY2021, recovered to 17.0% in FY2023 and then fell to 10.5% (FY2024) and 8.6% (FY2025) as the merger tripled equity [19]. Asset turnover fell from 0.43x (FY2023) to 0.26x (FY2025) because 43% of assets is unfinished plant [19].

Leverage and coverage. Interest cover (operating profit over financial expense) has stayed in a narrow band of 1.17x to 1.70x in FY2020-FY2025 [19]. That stability is the point: operating profit has grown roughly in step with interest, so the extra sales have not created headroom. Borrowings to equity rose from 2.33x (June 2022) to 3.19x (June 2025) and 3.17x (March 2026) [19].

Working capital. Receivable days were 98 in FY2023, 122 in FY2025 and 116 on annualised nine-month sales at March 2026; inventory days on cost of goods sold fell from 270 to 180 as stock was run down by BDT 181m in FY2026 [19] [2 p.3]. Against that, advances, deposits and prepayments rose by BDT 316m to BDT 1,437m in the same nine months [2 p.3]. Supplier credit is tiny: trade payables were BDT 5.6m at June 2025 [1 p.31].

Cash conversion. Operating cash flow over profit after tax was 1.09x (FY2020), 3.51x, 1.32x, -2.37x, 0.07x and -1.11x (FY2025), and 0.73x in the nine months to March 2026 [19]. The company's own explanations to DSE point at advances: in FY2025 it said short-term loans were shown in financing while their use for advances against raw-material purchases sat in operating cash flow [12].

Balance sheet: BDT 5.2bn of borrowings, BDT 1,126m of it unpaid interest, and BDT 3.0bn of unfinished plant

Borrowings. At June 2025 loans totalled BDT 4,905m: long-term loans BDT 3,234m (bank and NBFI BDT 2,924m, sponsor directors BDT 102m, other loans BDT 208m), short-term loans BDT 1,507m and the current portion BDT 164m [1 p.9] [1 p.30]. The lenders named are Social Islami Bank, Islami Bank Bangladesh, Southeast Bank, Phoenix Finance and Investments (BDT 1,153m) and Premier Leasing and Finance (BDT 742m) [1 p.30] [1 p.31]. By March 2026 borrowings were BDT 5,197m [2 p.3]. Financial expense of BDT 259m on average borrowings of about BDT 4,625m is 5.6% [19]; the notes give no interest rates.

Unpaid interest. Several loan notes add an 'interest outstanding' line to principal. Summing those lines gives BDT 904m at June 2024 and BDT 1,126m at June 2025 [1 p.30] [1 p.31] [1 p.32] [1 p.33] [19]. On the three Phoenix Finance loans, interest outstanding (BDT 438m) is 61% of principal (BDT 716m) [1 p.31]; on Islami Bank's PIF-MPI facility it is BDT 254m on BDT 277m of principal [1 p.32]. The FY2025 cash flow statement has no interest-paid line; in the nine months to March 2026 interest paid was BDT 91m against BDT 255m charged [1 p.12] [2 p.6]. The auditor's key audit matter on loans says it checked loan schedules, bank statements and the classification of loans, and did not modify its opinion [1 p.5].

Capital work-in-progress. BDT 2,859m at June 2025 (buildings BDT 1,501m, the rest plant and machinery) and BDT 3,014m at March 2026 [1 p.21] [2 p.3]. It grew by BDT 151m in FY2025 and BDT 155m in nine months of FY2026, all paid in cash [1 p.12] [2 p.6]. The capital commitment note refers to Annexure A, which is the PPE schedule [1 p.39]. We found no completion date, capacity in tonnes or remaining budget for the project in the filings read or in the DSE news archive for November 2024 to November 2026 [12].

Advances and receivables. Advances against purchases were BDT 977m at June 2025, of which 'Local Raw Materials' BDT 936m (BDT 475m a year earlier) and Bangladesh Press Holding BDT 18m [1 p.24]. Advance against land purchase of BDT 55.3m has been carried since FY2022 [1 p.23] [8 p.68]. Trade receivables of BDT 582m were 97% due within three months [1 p.22]. Inter-company balances with group companies were cleared to nil by June 2025 [1 p.22] [1 p.33].

Revaluation. PPE was revalued in 2016; the revaluation reserve of BDT 268m was 17.4% of equity at June 2025 [1 p.15] [19]. Depreciation is on the reducing-balance method [1 p.16], which keeps the charge low on older assets: BDT 19.5m in FY2025 on BDT 1,065m of PPE [1 p.38].

Audit. G. Kibria & Co. gave an unmodified opinion on FY2025 with key audit matters on revenue and receivables, inventory, PPE and loans [1 p.3] [1 p.4] [1 p.5]. For FY2024 the same firm added four emphasis-of-matter points: a long-outstanding BDT 5.9m L/C receivable, inventory records 'maintained erratically', WPPF paid entirely to employees instead of the 80:10:10 split the Labour Act requires, and the merger accounted for under the court scheme rather than at fair value [6 p.88]. The company states it has no contingent liability at June 2025 [1 p.39].

Peers: the highest margins of the three listed paper makers compared, and the highest interest burden

Peers. Sonali Paper & Board Mills and Hakkani Pulp & Paper Mills are listed paper makers with June year-ends; the table uses each company's audited FY2025 statements (year to 30-Jun-2025, standalone) and quotes their own line labels [10 p.63] [10 p.64] [11 p.8] [11 p.9]. Monospool calls its operating line 'Operating Profit' and its interest 'Financial Expense'; Sonali uses 'Profit from Operation' and 'Finance Cost'; Hakkani 'Profit from Operation' and 'Financial Expenses'. Loans are the loan lines on each balance sheet; Hakkani's 'Directors Current Account' (BDT 84.5m) is shown separately on its balance sheet and is left out, while Monospool's sponsor and other loans are inside its 'Long Term Loan' line and are included [11 p.8] [1 p.30].

Of the three, Monospool has the highest gross margin (27.6%) and operating margin (24.3%) and also the highest financial expense as a share of revenue (14.8%, against 3.6% at Sonali and 6.5% at Hakkani) [19]. Its loans are 3.19x equity, against 0.19x and 1.80x [19]. ROE comparisons are distorted by revaluation: Sonali's revaluation reserve is 89% of its equity, Hakkani's 51% and Monospool's 17% [19]. Product mixes differ (Monospool includes printing and security products), so margin gaps are not only efficiency.

Governance: Magura Group holds 18.7%; sponsors' family members are both gift recipients and lenders

Ownership. At June 2025 sponsors and directors held 14.50m shares (42.5%), financial institutions 3.17m (9.3%) and the general public 16.43m (48.2%) [1 p.27]. Magura Group PLC held 6.39m shares (18.7%) as a nominee director represented by managing director Mostafa Jamal Mohiuddin; Mustafa Kamal Mohiuddin held 6.0%, Md. Rezaul Islam 7.2% and Md. Anwar Hossain 5.4% [1 p.27].

Share gifts to family. DSE disclosures over the last 24 months show directors moving shares to family members outside the trading system: Mustafa Kamal Mohiuddin declared gifts of 1.02m shares to his son Mostafa Azad Mohiuddin and 1.02m to his spouse Dilara Mostafa (November 2024) and 308,640 more to his spouse (April 2026); Mostafa Jamal Mohiuddin 500,000 to his wife (December 2025); Md. Anwar Hossain 277,200 and Md. Rezaul Islam 369,600 to their wives (April 2026) [12]. Shares gifted to family members who are 'general shareholders' leave the sponsor-director count.

Related-party loans. The same two family members lend to the company: 'Long Term Other Loan' of BDT 208.5m at June 2025 is BDT 86.4m from Mostafa Azad Mohiuddin and BDT 122.1m from Dilara Mostafa, both listed in the related-party note [1 p.31] [1 p.38]. Sponsor directors' loans of BDT 102.2m are from Magura Group (BDT 29.8m), Bangladesh Development Group (BDT 69.3m) and Mustafa Kamal Mohiuddin (BDT 3.1m) [1 p.31]. The FY2025 cash flow shows BDT 216.4m received from sponsor directors [1 p.12]. The related-party note says the transactions were at arm's length; it gives no interest rate on these loans [1 p.38]. Key management pay was BDT 10.8m [1 p.39].

Other governance facts. The company was renamed Monospool Bangladesh PLC from 16-Mar-2025 [12]. National Credit Ratings assigned BBB long-term and ST-3 short-term with a 'Developing' outlook in December 2025, based on the June 2024 statements [12]. The FY2025 AGM was called for 29-Dec-2025, with a venue change announced on 18-Dec-2025 [12]. In August 2025 DSE queried an unusual price rise and volume, and the company said there was no undisclosed price-sensitive information [12].

What's next: FY2026 results on 09-Nov-2026 will show whether the unfinished mill and the interest bill moved

Capex and board decisions found in the DSE news archive for 31-Oct-2024 to 31-Oct-2026 (criteria: company news) [12]: on 14-Sep-2025 the board approved buying a hot-stamping machine, inkjet litho machines, Miyakoshi A4 cutting machines and a 6 tonnes-per-hour steam boiler, financed by the company; The Business Standard reported the cost at Tk3 crore (BDT 30m), to be installed in 2025 [15]. That installation date has passed; the outcome is unknown until the FY2026 annual report. The FY2025 stock dividend was declared 'for BMRE components and working capital' [12]. No board decision on completing the BDT 3.0bn capital work-in-progress appears in the archive.

Risks: interest, unpaid interest and the unfinished mill matter most

The risks below are tied to the line each moves. Scale for each: FY2025 profit before tax was BDT 159m and financial expense BDT 259m [1 p.10].

The two leverage risks interact. If lenders demanded cash interest instead of letting it accrue, the FY2025 operating cash flow of minus BDT 143m would have needed roughly another BDT 222m of funding [1 p.12] [19]. So far the gap has been filled by more short-term loans and BDT 216m from sponsors [1 p.12].

Shareholder returns: the margin-interest spread, the unfinished mill and cash decide them

What drives returns to shareholders. Three things decide what reaches shareholders. First, the spread between operating margin (24.3% in FY2025) and financial expense (14.8% of revenue): it left a pre-tax margin of 9.1% [19]. Second, whether the BDT 3.0bn of capital work-in-progress becomes producing plant; until then it adds interest but no sales. Third, cash: with free cash flow negative in each of FY2021-FY2025, cash dividends were paid in years when free cash flow was negative, and the board has shifted to stock dividends (15% for FY2025) [19] [12].

Earnings quality. Reported profit has few one-offs: other income was BDT 1.7m, and FY2025 included a BDT 6.6m reversal of excess tax provision and a BDT 5.9m write-off of the L/C receivable [1 p.10] [1 p.36]. The quality question is cash, not accruals of income: profit after tax of BDT 387m over FY2020-FY2025 compares with cumulative operating cash flow of minus BDT 194m [19].

MONOSPOOL closed at BDT 100.7 on 29-Oct-2026 [18]. On twelve-month profit to March 2026 of BDT 131.7m (EPS BDT 3.36) that is 30.0x earnings, and 2.41x the March 2026 NAV of BDT 41.83 [2 p.3] [19]. Market capitalisation was BDT 3.95bn and borrowings BDT 5.20bn [19]. These are facts about the price, not a view on it.

FAQ

What does Monospool Bangladesh make?

Paper and paper products: newsprint and offset paper from the mill merged in from Pearl Paper, photocopy and computer paper, cheque books and security products, exercise books and ATM rolls [1 p.35].

When did Monospool merge with Pearl Paper & Board Mills?

The merger took effect in February 2024 after High Court approval on 19-Oct-2023 and BSEC consent on 30-Jan-2024 [6 p.42] [6 p.88].

How much debt does Monospool have?

BDT 5,197m of borrowings at 31-Mar-2026, 3.17x equity [2 p.3].

What dividend did Monospool pay for FY2025?

5% cash and 15% stock; the bonus shares were credited in February 2026 [12].

When are the FY2026 results?

The board meets on 09-Nov-2026 to consider the audited statements for the year to 30-Jun-2026 [12].

Which reports does this note use?

Annual reports FY2021-FY2025 (with five-year tables back to FY2017), the Q1, H1 and nine-month FY2026 statements, and the peers' FY2025 annual reports.

Sources

1. Monospool Bangladesh PLC audited financial statements, year to 30-Jun-2025 · link · accessed 2026-10-31
2. Monospool Bangladesh PLC unaudited statements, nine months to 31-Mar-2026 (Q3 FY2026) · link · accessed 2026-10-31
3. Monospool Bangladesh PLC unaudited statements, six months to 31-Dec-2025 (H1 FY2026) · link · accessed 2026-10-31
4. Monospool Bangladesh PLC unaudited statements, three months to 30-Sep-2025 (Q1 FY2026) · link · accessed 2026-10-31
5. Monospool Bangladesh PLC unaudited statements, nine months to 31-Mar-2025 (Q3 FY2025) · link · accessed 2026-10-31
6. Bangladesh Monospool Paper Manufacturing Co. Ltd Annual Report 2023-24 (year to 30-Jun-2024) · link · accessed 2026-10-31
7. Bangladesh Monospool Paper Manufacturing Co. Ltd audited financial statements, year to 30-Jun-2023 · link · accessed 2026-10-31
8. Bangladesh Monospool Paper Manufacturing Co. Ltd Annual Report 2022 (year to 30-Jun-2022) · link · accessed 2026-10-31
9. Bangladesh Monospool Paper Manufacturing Co. Ltd Annual Report 2021 (five-year data FY2017-FY2021) · link · accessed 2026-10-31
10. Sonali Paper & Board Mills Limited Annual Report 2024-2025 (year to 30-Jun-2025) · link · accessed 2026-10-31
11. Hakkani Pulp & Paper Mills PLC audited financial statements, year to 30-Jun-2025 · link · accessed 2026-10-31
12. Dhaka Stock Exchange news archive for MONOSPOOL, 31-Oct-2024 to 31-Oct-2026 (company disclosures) · link · accessed 2026-10-31
13. The Business Standard, 'Monospool Paper to amalgamate with Pearl Paper' (12-Mar-2023), reporting the company's DSE disclosure · link · accessed 2026-10-31
14. The Business Standard, 'Why Monospool Paper merging with Pearl Paper' (12-Mar-2023) · link · accessed 2026-10-31
15. The Business Standard, 'Magura Multiplex, Monospool Bangladesh to invest Tk11cr in new machinery' (15-Sep-2025) · link · accessed 2026-10-31
16. The Daily Star, 'Bangladesh gets 3 more years for LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
17. The Business Standard, 'Bangladesh gets 3 more years before LDC graduation' (30-Oct-2026) · link · accessed 2026-10-31
18. AnalystBro price data (TradingView feed): DSE:MONOSPOOL daily bars to 29-Oct-2026 · link · accessed 2026-10-31
19. AnalystBro model for this report (workbook tabs below) · link · accessed 2026-10-31