PACRA Maintains Entity Ratings of Ali Embroidery Mills (Pvt.) Limited

Ali Embroidery Mills (Private) Limited, part of the Sefam Group, specializes in Schiffli and Multi-Heads embroidery. The Company derives the bulk of its revenue from embroidery services for its sister concern, Sefam (Private) Limited's associated brands “Bareeze” and “Kayseria”. The ratings reflect the Company’s adequate business profile characterized by growing revenues on the back of stable demand for embroidered fabric as well as recent venture into retail through its brand “The Embroidery Company”. Margins remain strong, though displaying stagnation over recent years. This is expected to improve with further expansion into retail. The Company's bottom line has remained steady over the years, though remains relatively small with limited cushion against any adverse situation. Conservative financial structure with minimal dependence on short-term borrowing bodes well for the financial risk profile. This is supported by prudent working capital management and strong coverages. Ratings further reflect association with the well-established Sefam Group as well as sponsors willingness to provide support when required, as demonstrated in the past. Meanwhile, the Company’s overall governance structure and financial transparency need improvement.
The ratings are dependent on anticipated growth in topline resulting from recent penetration into retail. Additionally, sustainability of working capital management and coverages is critical. Improvement in corporate governance framework will be important.

About the Entity
Ali Embroidery Mills (Private) Limited, incorporated in 1972, is part of the Sefam Group, most famous for its fashion brand Bareezé. The Company was founded by Mr. J.A Zaman (late) and later became the launching pad for Sefam (Pvt.) Limited & Sarena Textile Industries. The Company’s production facilities are located at Sheikhupura Road, comprising 34 Schiffli machines and 72 Multi-Heads embroidery machines. The Group has expanded its operations over the years and owns many well-known retail brands, such as, Bareezé, Leisure Club, Minnie Minors, Chinyere, Home Expressions and Kayseria, among others.

The ownership of the Company lies with the five children of Mr. J.A Zaman. Operations of the company are looked after by the Chief Executive Officer, Mr. Tariq Zaman, with diverse experience in textile, poultry, dairy and transportation sectors. He is assisted by a professional management team.