Din Textile Mills Limited

CREDIT RATING REPORT | Sep-25

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
05-Sep-25 A- A2 Stable Maintain -
06-Sep-24 A- A2 Stable Maintain -
08-Sep-23 A- A2 Stable Maintain -
08-Sep-22 A- A2 Stable Maintain -
08-Sep-21 A- A2 Stable Initial -
About the Entity

Din Textile is a public limited company, incorporated in 1988. It is engaged in the manufacturing and sale of yarn and griege fabric. The Company’s operational spectrum encompasses spinning, weaving, and dyeing. The overall control of the Company vests in a nine-member board chaired by Mr. Shaikh Muhammad Jawed. The CEO, Mr. Shaikh Muhammad Tanveer, manages the day-to-day operations of the Company, supported by a team of experienced professionals.

Rating Rationale

The ratings of Din Textile Mills Limited (“Din Textile” or “DTML” or “the Company”) reflect its established presence in the spinning and weaving sectors, the key segments of the overall textile value chain, augmented with state-of-the-art machinery across its spinning, weaving, and dyeing facilities. The Company produces a diversified range of products, including combed compact yarn, core-spun Lycra yarn, slub Lycra yarn, dyed yarn, melange yarn, ply yarn, gassed yarn, knitwear yarn, greige fabric, and bleached cotton web for surgical and cosmetic use. In terms of segment-wise revenue contribution, spinning is the foremost, followed by weaving. The Company's long-term relationship with financially strong clientele strengthens business stability. Driven by favorable pricing dynamics, DTML is strategically reorienting its knitwear yarn business from export to the domestic market.
The Company’s margins witnessed improvement owing to optimized raw material procurement and the integration of 8MW of solar capacity into its energy mix, coupled with reduced finance costs resulting from monetary easing. DTML is further undertaking CAPEX to install an additional ~3MW solar capacity to mitigate the risk of escalating energy costs. A gradual shift in international demand and consumption trends for yarn and greige fabric has been observed, primarily attributable to the global recession and changing customer preferences. The Company's management is focused on addressing these challenges adeptly and has ventured into the stitching segment to serve the export-made-up market, deploying minimal capital expenditure through the utilization of existing infrastructure. This strategy is anticipated to diversify revenue streams by accessing new export markets and enhancing the Company’s sustainability profile. During 9MFY25, the Company’s topline improved to PKR 32.2bln (FY24: PKR 39.6bln, 9MFY24: PKR 29.7bln) on the back of improved local sales. While the financial risk profile is considered adequate, DTML has maintained a highly leveraged capital structure. The Company’s working capital needs are primarily financed through a combination of internally generated cash flows and short-term borrowings. The ratings take comfort from the sponsor's commitment to providing financial support, creating a cushion in the financial matrix of DTML.

Key Rating Drivers

The ratings are dependent upon the improvement in cost structure while expanding business volumes. The efficient utilization of short-term borrowings to induce growth in sales plays a pivotal role. Adherence to the debt matrix, generating sufficient cash flows and maintaining coverages at an optimal level is a prerequisite for assigned ratings.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

Din Textile Mills Limited

rating analysis

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Profile
Legal Structure

Din Textile Mills Limited is public limited company under the repealed Companies Ordinance 1984 ( Now the Companies Act 2017) and is quoted on Pakistan Stock Exchange. 


Background

Founded by the Late Mr. SM Munir, the Din Group was established in 1954 with a leather venture, has evolved into a diversified Pakistani conglomerate with operations across textiles, dairy, poultry, and real estate. The group is recognized as a leading exporter with substantial annual sales. Din Textile Mills Limited, incorporated in 1987, is a key subsidiary, specializing in high-quality yarn and value-added products through advanced spinning and dyeing facilities.


Operations

The Company has four state-of-the-art spinning units and one dyeing unit located at Multan Road Pattoki & Raiwind. The Company operates with an annual production capacity of 46.1 million Kgs yarn and 88.3 million fabric. The Company's Unit I is dedicated to Melange (Blended) Yarns. At Unit II,  Spandex Core Spun Yarn (both carded and combed) and Slub Yarn is produced. Unit III manufactures export-quality compact yarn and Spandex core spun with compact yarn, and Unit IV is engaged in weaving operations. Din Power Plant generates power for all the Spinning and Dyeing units so that the production activities can run smoothly and high yarn quality can be assured. 


Ownership
Ownership Structure

The sponsoring family collectively holds a majority stake of 44.3% in the Company through direct individual shareholdings. Din Corporation (Pvt.) Ltd account for an additional 12.3%, further strengthening family and related-party control. The general public represents the single largest non-sponsor category with 30.1% of the shareholding, followed by others at 11.5%. Institutional investors, including NIT & ICP, modarabas, mutual funds, banks, and insurance companies, hold a combined 1.8% stake in the Company.


Stability

The operations are governed by the second generation of the family. Shaikh Muhammad Tanveer, son of Late Mr. SM Munir, is the Chief Executive Officer of DTML. No changes in the ownership structure is anticipated in the foreseeable future.


Business Acumen

The sponsors of the Company possess extensive expertise and decades of experience in the textile sector, having effectively managed its operations for 38 years. Under their stewardship, the Company has remained aligned with its core philosophy of pursuing sustainable growth, ensuring operational excellence, and adhering to industry best practices.


Financial Strength

Din Group operates a diversified business portfolio with interests spanning textiles, dairy, poultry, energy, and real estate. This broad-based presence across multiple sectors reflects the sponsors’ robust financial capacity and their ability to sustain and grow businesses in diverse industries.


Governance
Board Structure

The overall control of the Company is vested in a nine-member Board of Directors, chaired by Shaikh Muhammad Jawed. The Board comprises four non-executive directors, two executive directors, and three independent directors. The inclusion of independent directors has strengthened the governance profile of the Company.


Members’ Profile

Shaikh Mohammad Jawed serves as the Non-Executive Director and Chairman of Din Textile Mills Limited. Following the completion of his academic pursuits, he joined the family business in 1975 and has since played a pivotal role in driving the Group’s growth and success. In addition to his business leadership, he remains actively involved in various social and welfare initiatives dedicated to humanitarian causes, supporting underprivileged and disadvantaged communities. Shaikh Mohammad Naveed is the Director of Din Textile Mills Limited (Unit of Din Group of Companies). He is Graduate from Boston University (BU), USA. in Bachelor of Science in Business Administration (BSBA) and a Bachelor of Arts in Economic (BA Econ). He is a Qualified ISO-9000 Auditor from International Registrar of Certified Auditors (IRCA) & Microsoft Certified Professional (MCP). Being a Director of Din Textile Mills Ltd., his prime responsibility is to take care of the Sales, Procurement Balancing / Modernization of Textile Spinning, Dyeing, Power Plants of the company to meet high quality standard of the products.


Board Effectiveness

DTML has established two board committees – Audit Committee and Human Resource & Remuneration Committee.. During FY24, five meetings of the board of directors were held to evaluate the Company's overall performance towards its targets. The minutes of those meetings have been formally documented.


Financial Transparency

Naveed Zafar Ashfaq Jaffery & Co. Chartered Accountants are the external auditors of the Company. The auditor is listed in Category "A" of the State Bank's panel of auditors. They have expressed an unqualified opinion on the financial statements of the Company for the year ending June 30th, 2024. 


Management
Organizational Structure

The Company’s organizational structure ensures strong governance, accountability, and operational efficiency. The Board of Directors provides overall strategic direction, supported by key functions such as Personal Accounts, Internal Audit, and Raw Material Procurement, reflecting the Company’s emphasis on financial discipline, transparency, and supply chain control. The Chief Operating Officer oversees critical areas including Marketing & Sales, MIS & IT, Costing, Finance, Power Units, and Production Units, ensuring seamless coordination between commercial, financial, and operational activities. This integrated structure enables effective decision-making, optimal resource utilization, and streamlined processes, positioning the Company to achieve sustainable growth, strengthen market competitiveness, and deliver long-term value to its stakeholders.


Management Team

Shaikh Muhammad Tanveer serves as the Chief Executive of Din Textile Mills Limited, a flagship unit of the Din Group of Companies. Over the course of his career, he has held prominent leadership positions, including Chairman of Punjab Industrial Estates (PIE), where he contributed to the development of key business and industrial initiatives under the Government of Punjab. He has also served as Chairman of the All Pakistan Textile Mills Association (APTMA), demonstrating his active role in advancing the interests of the textile industry and fostering industrial growth at both provincial and national levels.


Effectiveness

Din Textile works closely with end-users in studying their day-to-day activities and finding opportunities to automate and streamline various tasks. The Company is committed to the process of upgrading and enhancing its IT infrastructure and moving toward greater process automation


MIS

SAP was implemented on 1st July 2020 for the best utilization of Company resources and timely decisions. DTML is currently using SAP version SAP ECC 6.0 A1 implemented with the professional help of Siemens Pakistan Pvt. Limited.


Control Environment

A strong control environment and established internal control framework exists in the company comprising clear structures, segregation of duties, authorization limits for the Company officials for operating bank accounts and approving expenditures, well-define policies and procedures, budgeting and review processes to reduce the risk of undetected error/fraud and limit opportunities for misappropriation of assets or concealment of intentional misstatements. 


Business Risk
Industry Dynamics

The country's textile exports reached USD 17.8bln during FY25 compared to USD 16.6bln in the same corresponding period, indicating a modest growth of ~7.2% on a YoY basis. In value terms, the Composite & Garments segment had the highest contribution of USD 9.1bln, followed by Weaving segment at USD 6.0bln and Spinning segment at USD 1.2bln. This growth is primarily attributed to a surge in the exports of Cotton Yarn, Towels, Readymade garments, Bed wear and Made-up articles. However, the exports of Combed cotton, Knitwear, Cotton cloth and Tents, canvas & tarpaulins reflected a dip YoY. The global economic slowdown subdued the demand patterns and consumption trends in the international market. The factors affecting the textile industry are escalated energy tariffs and challenges in the procurement of raw materials on account of lower local cotton yield impacting the finished product margins. However, the gradual decline in the interest rates is anticipated to provide comfort to the local industry.


Relative Position

DTML operates with the capacity of ~136,656 spindles and ~144 looms, positioning the Company within mid tier segment of the overall textile industry.  


Revenues

During 3QFY25, the Company’s revenue base registered notable growth, reaching PKR 32.2bln (3QFY24: PKR 29.6bln), reflecting an 8.8% YoY increase, primarily driven by favorable pricing dynamics. The sales mix demonstrated a greater concentration in the domestic market. Export sales, however, declined significantly on a YoY basis, recorded at PKR 8.3bln (3QFY24: PKR 11.7bln). The Company continues to maintain a diversified and stable international customer base, with key export destinations including Portugal, France, China, Italy, and Bangladesh. Local sales exhibited strong momentum, advancing by 32% YoY to PKR 24.1bln (3QFY24: PKR 18.2bln).


Margins

During 3QFY25, the Company’s gross profit margin improved to 8.3% (3QFY24: 4.1%), supported by favorable raw material procurement and optimization of energy costs. A similar trend was reflected in the operating profit margin, which stood at 6.6% compared to 2.1% in 3QFY24. Finance costs declined to PKR 2.4bln (3QFY24: PKR 2.9bln), attributable to the easing interest rate environment. The Company reported net losses of PKR 562mln, a significant reduction from PKR 2,302mln in 3QFY24. Consequently, the net profit margin, though negative, improved to -1.7% from -7.8% in the same period last year.


Sustainability

The Company is actively diversifying into value-added segments through toll manufacturing, aimed at broadening its revenue base and enhancing operational flexibility. In parallel, it is undertaking cost-efficiency initiatives, such as the installation of solar energy solutions, to mitigate exposure to energy cost volatility. These strategic measures are expected to support the long-term sustainability profiel of the Company.


Financial Risk
Working capital

The Company meets its working capital requirements through a mix of internally generated cash and short-term borrowings. As of end-Mar25, the Company’s net working capital cycle was contracted to 121 days (end-Jun 24: 131days) due to an optimization of the inventory days (end-Mar25: 88days; end-Jun24: 98days).


Coverages

As of end-Mar25, the Company’s Free Cash Flows from Operations (FCFO) stood at PKR 3.6bln compared to PKR 4.6bln at end-Jun24. This supported a slight improvement in coverage ratios. Consequently, the Company’s interest coverage strengthened to 1.6x (end-Jun24: 1.2x), while core operating coverage improved to 1.1x (end-Jun24: 0.9x).


Capitalization

The Company maintains a highly leveraged capital structure. As of end-Mar25, overall leveraging was recorded at 58.7%, compared to 59.9% at end-Jun24. The equity base strengthened to PKR 8.2bln (end-Jun24: PKR 7.8bln). Long-term borrowings stood at PKR 6.4bln (end-Jun24: PKR 7.2bln), representing 54.7% of the total borrowing portfolio.
 
 

Sep-25

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Din Textile Mills Limited

financial summary

(PKR mln)

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Mar-25
9M		 Jun-24
12M		 Jun-23
12M		 Jun-22
12M
A. BALANCE SHEET
1. Non-Current Assets 15,694 15,878 16,298 9,999
2. Investments 0 0 0 0
3. Related Party Exposure 0 0 0 0
4. Current Assets 21,521 18,858 21,694 18,111
a. Inventories 11,239 9,492 11,795 10,186
b. Trade Receivables 7,011 5,164 4,914 4,843
5. Total Assets 37,214 34,736 37,992 28,111
6. Current Liabilities 16,936 15,037 14,725 9,334
a. Trade Payables 2,376 2,020 950 665
7. Borrowings 11,663 11,580 12,441 10,431
8. Related Party Exposure 0 0 0 0
9. Non-Current Liabilities 425 368 287 232
10. Net Assets 8,190 7,752 10,540 8,113
11. Shareholders' Equity 8,190 7,752 10,540 8,113
B. INCOME STATEMENT
1. Sales 32,174 39,608 32,314 31,353
a. Cost of Good Sold (29,494) (37,291) (29,212) (25,382)
2. Gross Profit 2,681 2,317 3,102 5,970
a. Operating Expenses (551) (782) (860) (671)
3. Operating Profit 2,130 1,535 2,242 5,299
a. Non Operating Income or (Expense) 121 167 147 (177)
4. Profit or (Loss) before Interest and Tax 2,251 1,702 2,389 5,122
a. Total Finance Cost (2,406) (3,985) (3,013) (1,389)
b. Taxation (408) (486) (243) (290)
6. Net Income Or (Loss) (562) (2,769) (868) 3,443
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 3,590 4,666 1,172 4,275
b. Net Cash from Operating Activities before Working Capital Changes 758 1,051 (1,019) 3,242
c. Changes in Working Capital (1,405) 812 2,901 (4,272)
1. Net Cash provided by Operating Activities (647) 1,863 1,883 (1,030)
2. Net Cash (Used in) or Available From Investing Activities (622) (699) (3,969) (1,728)
3. Net Cash (Used in) or Available From Financing Activities 268 151 1,189 (56)
4. Net Cash generated or (Used) during the period (1,001) 1,315 (897) (2,814)
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) 8.3% 22.6% 3.1% 77.7%
b. Gross Profit Margin 8.3% 5.8% 9.6% 19.0%
c. Net Profit Margin -1.7% -7.0% -2.7% 11.0%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) 6.8% 13.8% 12.6% 0.0%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] -9.4% -30.3% -9.3% 53.8%
2. Working Capital Management
a. Gross Working Capital (Average Days) 140 145 179 145
b. Net Working Capital (Average Days) 121 131 170 138
c. Current Ratio (Current Assets / Current Liabilities) 1.3 1.3 1.5 1.9
3. Coverages
a. EBITDA / Finance Cost 1.3 0.8 1.2 4.9
b. FCFO / Finance Cost+CMLTB+Excess STB 1.1 0.9 0.3 1.6
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 4.5 10.1 -4.8 2.4
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 58.7% 59.9% 54.1% 56.2%
b. Interest or Markup Payable (Days) 98.8 127.8 137.1 112.7
c. Entity Average Borrowing Rate 26.1% 30.4% 24.9% 13.6%

Sep-25

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Din Textile Mills Limited

rating scale

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Sep-25

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Din Textile Mills Limited

regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
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Sep-25

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