PACRA Maintains the entity rating of Prosperity Weaving Mills Limited

The assigned rating of Prosperity Weaving Mills Limited (“PWML” or “the Company”) emanates from the prominent profile of the Nagina Group (“the Group”), one of the oldest medium-sized textile clusters in Pakistan. The Group includes six private limited companies and three publicly listed companies, including the spinning sector’s Nagina Cotton Mills Limited (NCML) and Ellcot Spinning Mills Limited (ESML), as well as PWML in the weaving sector. PWML’s ratings reflect sustained profitability and business profile over the years. The Company is engaged in the production and sale of greige fabric and operates with a weaving unit of 382 air jet looms, achieving a capacity utilization of 97.5% and a production capacity of 91.1mln meters. PWML consumed PKR 13bln worth of yarn sourced from other group entities, namely NCML and ESML. The Company has a total energy requirement of 6.4 MW, which is met through a mix of 63% gas, 28% furnace oil, 5% LESCO, and 4% solar power. Given the recent imposition of an additional government gas levy, which will lead to higher energy costs, the Company has shifted towards alternative energy sources such as WAPDA and furnace oil to ensure operational efficiency. Moreover, PWML is in the process of upgrading its compressor under the BMR project worth 400mln, providing additional energy cost savings. The Textile sector continues to face significant challenges due to slowdowns in both the local and international markets. The contemporary imposition of tariffs by the USA has further contributed to the rise of universal market uncertainty. During 9MFY25, the topline of the Company stood at PKR 14.2bln (FY24: 18.7bln, 9MFY24: PKR 14.0bln), reflecting a modest YoY growth of 1.2%. The sales mix is oriented towards local sales with a 70% contribution, while the remaining 30% is generated from the exports segment. The business sustainability takes comfort from the Company’s association with stable entities as their top clientage. The net margins improved with a bottom line of PKR 104mln (FY24: PKR 87mln, 9MFY24: PKR 38mln), rationalized through a refined cost structure and diminished finance costs. The financial risk matrix of the Company remains moderate, with working capital structure, fulfilling its requirements through a combination of short-term borrowings and internally generated cash flows. Despite a decline in cash flows, coverage ratios remain stable owing to reduced finance costs. The Company maintained a leveraged Capital structure (54.3%), consisting of 34.5% short-term borrowings.
The ratings are dependent upon the sustained market position of the Company. Moreover, the company’s ability to generate enough cash flows to fulfill its financial obligations is critical, along with prudent investment decisions. The equity base of the Company is satisfactory and should be beefed up, going forward.

About the Entity
Prosperity Weaving Mills Limited, incorporated in 1991 as a public limited company, has an intact business profile and is engaged in the production of greige fabric and operates with a weaving unit comprising 382 looms. The majority stakes (87.49%) of the Company are held by Nagina Group, through group companies and sponsoring individuals. The Company's board comprises ten members. Mr. Shahzada Ellahi Shaikh is the Chairman of the Board. The management team is headed by the CEO, Mr. Raza Ellahi Shaikh, who is well-versed in the textile business, providing the requisite acumen.