PACRA Maintains the Entity Ratings of Al Barka Fabrics Private Limited

The ratings reflect the adequate positioning of Al Barka Fabrics Private. Limited (“Al Barka Fabrics” or “the Company”) in the home-textile and made-up industry. Being the flagship company of Al Barka Group, the Company has a long history of operations in the respective sector on a standalone basis. The Company is engaged in Textile Processing (Bleaching, Dying, Printing, and Stitching). A major chunk of the Company’s topline emanates from the export sales. The Company has established a stable customer base around the globe. The customers are spread across countries of Europe, South America, Africa, and the US. During the last few years, the Company’s revenue base exhibited a steady improvement. During FY23, the topline witnessed a surge (FY23: PKR 6.7bln; FY22: PKR 5.6bln) despite a suppressed demand pattern in the international market. The sales mix skewed towards the export sales clocking at PKR 5.7bln (FY22: PKR 4.9bln). This has benefitted the topline with attractive foreign exchange gain. A minimum portion of revenue is captured from the local sales. The Company registered a hike on the expense side, aligning with the industry dynamics. Despite this incline, the company was able to achieve a net profitability of PKR 398mln (FY22: PKR 414mln). The margins remained largely the same whereas the coverages remained in a moderate range. Going forward, the management of the working capital cycle remains essential. On a consolidated basis, the Company’s strategic investments in diverse sectors are expected to capture healthy gains, going forward. The sponsors have penetrated the international market, with an equity investment in Renevolt, UAE.
The ratings are dependent upon the management's ability to capitalize on growth opportunities in a competitive landscape, operate at an optimal level, and sustain margins, going forward. The company is expected to adhere to conservative financial discipline, which would be crucial to ratings.

About the Entity
The Company was incorporated in 1998 as a private limited company. The core operation of the business is Textile Processing (Bleaching, Dying, Printing). The manufacturing facility is located in Faisalabad, the area known as the textile hub of Pakistan. Al Barka Fabrics Pvt. Limited is a family-owned business, where the major stake is vested with Mr. Muhammad Aslam Sheikh. The remaining stake rests with his wife, Mrs. Riffat Aslam, and his son, Mr. Muhammad Asad Sheikh. The board comprises four members from the Sponsoring family. The inclusion of an independent director shall add to the governance framework. The Company has invested in diverse sectors of the economy.