Exactly How Discounted Is Nishat Mills (NML) Right Now?

Nishat Mills Limited (NML) is widely discussed not just for its core textile business but also for the value embedded in its investments in associated companies like MCB Bank, DG Khan Cement, Nishat Power, Lalpir Power, and Pak Gen Power. Several recent research reports highlight how the current share price compares to the intrinsic and portfolio values determined by analysts. Below we explain how discounted NML appears based on these professional research sources.

NML Is Trading Below Its Estimated Portfolio Value

Discount to Sum-of-the-Parts (SOTP) Value

According to a recent research report, Nishat Mills’ sum-of-the-parts value (SOTP) — which includes both the core textile business and the value of its holdings in other group companies — works out to around PKR 302 per share. At current share prices, NML is trading at approximately a 53 percent discount to this calculated SOTP value.

📢 Announcement: You can now access our services and similar analyses by opening an account with us via JS Global

This means the market price is significantly lower than what analysts estimate the company is fundamentally worth when accounting for the combination of its textile operations plus its portfolio of investments.

Discount Reflects Embedded Holdings

Part of the reason for this discount is that the portfolio value assigned to major listed holdings like MCB Bank and DG Khan Cement in the SOTP calculation alone exceeds the current market price of NML’s own shares. Analysts explicitly note that the holding value component in the SOTP is higher than the share price, implying the core textile operations are essentially being valued at zero by the market relative to intrinsic value.

Valuation Multiples Show NML Is Cheap Relative to Earnings and Book Value

Price-to-Earnings Multiple

NML’s forward P/E multiple is reported at around 8.8x for FY25 and 5.2x for FY26 (based on AKD Securities’ estimates). These are low multiples relative to broader market averages, suggesting the stock is cheap relative to expected earnings.

Price-to-Book and Price-to-Sales Multiples

📢 Announcement: We're on WhatsApp – Join Us There! 

On a price-to-book basis, NML trades at 0.3x to 0.31x, meaning the market values it at less than one-third of its reported book value. Enterprise value to sales metrics are also low. These valuation ratios signal that the company’s assets, earnings, and sales are being priced cheaply by the market today.

Low multiples like these typically indicate one of two things according to research reports: either the company is undervalued or the market expects lower growth or higher risk going forward. In NML’s case, analysts consider the valuation attractiveness while also noting near-term headwinds such as margin pressures.

What Is Driving the Discount

Portfolio Value Versus Share Price

The research highlights that one of the chief drivers of the discount is the portfolio of stakes in other listed companies. These stakes provide both potential capital gains and dividend income, yet the market still prices NML shares significantly below what those holdings alone could suggest as fair value. This contributes to the large gap between the calculated SOTP value and the actual trading price.

Market Pricing of Core Textile Business

Analysts also note that recent pressure on textile margins and profitability has weighed on valuations, keeping multiples low. Weak gross margins and taxation issues have impacted earnings, making investors cautious.

Summary: How Discounted Is NML?

Based strictly on research reports:

• NML is trading at about a 53 percent discount to its estimated SOTP value.
  
• Its valuation multiples (P/E and P/B) sit at low levels, often interpreted as a sign of undervaluation.
  

This means the market price of the stock is significantly below what professional analysts estimate as fair value when including both documented earnings and the value of its investment portfolio. The discount reflects a combination of below-average textile profitability and investor caution despite attractive embedded value in group investments.

What Are Analysts Thinking About NML Stock?

According to the KSEStocks Database, NML is covered by 5 analysts in Pakistan and they have an average price rating of PKR 234. This average price target suggests an upside of 19.3% from the last close of PKR 195.76.

According to EPS estimates from 9 different brokers, NML has an average 2026 EPS expectation of 20.2. This suggests the stock is now trading at a forward PE of 10.3.

Why do we compile research firms’ forecasts? Broker research is fragmented across different houses. Compiling it in one place helps investors see consensus, identify divergence, and think independently rather than relying on a single view.

⚠️ This post reflects the author’s personal opinion and is for informational purposes only. It does not constitute financial advice. Investing involves risk and should be done independently. Read full disclaimer →