Saigal Packages Industries (Pvt.) Limited

CREDIT RATING REPORT | Aug-25

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
07-Aug-25 BBB- A2 Stable Maintain -
07-Aug-24 BBB- A2 Stable Initial -
About the Entity

Saigal Packages Industries (Pvt.) Ltd is a private limited company established in 2007. CEO, Mr. Tauseef Ahmad owns the majority of the Company, with 99.34% of the shares. The remaining shares are split equally between his son, Mr. Ahsan Tauseef, and his wife, Mrs. Amna Tauseef. The sponsors also own AJ Containers, which manufactures adhesive tapes, and are supported by a team of professionals.

Rating Rationale

Saigal Packages Industries Limited’s (“SPI” or “the Company”) ratings reflect an emerging business profile in the industrial packaging industry. The Company is engaged in the manufacturing and sales of flexible packaging solutions offering a range of products, including plastic packaging and tin containers for food items, and provides comprehensive packaging design and printing services. SPI’s client base includes prominent and reputable names across various industries, showcasing its adequate market presence and credibility, but it faces concentration risk with a few customers contributing a significant portion of its revenue. The local packaging industry operates in a fragmented landscape and is highly dependent on imported polypropylene and polyethylene resin, making it sensitive to adverse exchange rate movements and global crude oil price trends. Rising energy costs and varying levels of automation and quality standards among manufacturers also influence the overall sector performance. Moreover, the demand side of the packaging sector is closely tied to consumption trends within the fast-moving consumer goods (FMCG) segment, particularly the edible oil and food industries, which directly drive the need for flexible packaging solutions such as plastic pouches, lamination rolls, and tin containers manufactured by SPI. Looking ahead, the packaging sector is expected to benefit from improvements in key macroeconomic indicators, including exchange rate stabilization and a gradual reduction in policy and interest rates. These developments are likely to support industry growth and enhance business sentiment. During 9MFY25, SPI recorded net sales of ~PKR 3,227mln, reflecting an annualized growth of ~17.5% compared to ~PKR 3,661mln in FY24. Margins also improved at all levels, supported by increased sale volumes and better cost control measures. The Company maintains a closely held ownership structure, with management led by family members. The second generation is now actively involved in the business, contributing to operational continuity and strategic oversight. However, there remains room for improvement in the overall governance framework, as the Company currently lacks formal board committees and independent oversight. Additionally, the external auditors are only QCR-rated. While the management demonstrates an adequate understanding of business operations and monitors performance through budgets and forecasts, the establishment of an internal audit function would further strengthen the internal control environment. Moving forward, the Company is actively pursuing capacity expansion in the plastic packaging segment, with plans to finance these initiatives through internally generated cash flows, as outlined in its business plan. The financial risk profile of the Company is supported by adequate coverage ratios, working capital cycle and stable cash flows. SPI maintains a low-leveraged capital structure, relying primarily on long-term borrowings obtained for capital expenditure, while day-to-day working capital requirements are managed through internally generated cash flows.

Key Rating Drivers

The ratings are dependent on SPI's ability to maintain its position in its specific business niches and sustain growth in the face of challenging industry dynamics. Essential factors include bolstering share capital, achieving consistent revenue growth, and margins, with improvement in governance framework, and maintaining prudent financial performance in-line with projections.

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

Saigal Packages Industries (Pvt.) Limited

rating analysis

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Profile
Legal Structure

The company was incorporated in Pakistan as a private limited company in August 2007, under the now-repealed Companies Ordinance, 1984 (currently governed by the Companies Act, 2017), under the name Saigal Packages Industries Limited.


Background

Mr. Tauseef Ahmed's entrepreneurial journey began with the establishment of AJ Containers, a sole proprietorship specializing in tape manufacturing. Recognizing opportunities for growth and diversification, he ventured into the plastic packaging industry in 2007 with the launch of a new manufacturing plant named 'Saigal Packages Industries Limited'.


Operations

The principal activity of Saigal Packages Industries Limited is the manufacturing of flexible packaging solutions. The company's manufacturing facility is located at W-296, JH, Sindh Industrial Area.


Ownership
Ownership Structure

Mr. Tauseef Ahmad owns the majority of the company, with 99.34% of the shares. The remaining shares are split equally between his son, Mr. Ahsan Tauseef, and his wife, Mrs. Amna Tauseef.


Stability

The Company’s ownership structure seems stable as no major change in the shareholding structure is expected soon. Although a formal succession plan exists, the second generation has been gradually inducted into the family business.


Business Acumen

The family has been engaged in the packaging business for decades. The significant growth over the years highlights their strong business and strategic foresight.


Financial Strength

The sponsors’ investments in AJ Containers, recognized for its adhesive tape products, demonstrate their ability to extend strong financial support when required."


Governance
Board Structure

The company lacks a formal governance framework. The oversight function is normally the function of the Board is exercised by the Sponsors. They are responsible for the oversight of their respective departments.


Members’ Profile

Mr. Tauseef is the CEO of the company and has headed this business for the past 18 years. Under his leadership, the company has achieved significant growth and established a strong market presence. His experience and vision have contributed to innovation and operational performance.


Board Effectiveness

The company currently does not have a formal board structure or established committees.


Financial Transparency

Rao & Co. Chartered Accountants are the Company's external auditors. The firm is QCR-rated but not on the SBP’s panel of auditors. The auditors issued an unqualified opinion on the Company’s financial statements for the year ended June 2024.


Management
Organizational Structure

Saigal Packages Industries Limited has a lean organizational structure divided into various functional departments. Currently, the organizational structure is divided into five main functions namely; 1) Sales 2) Production Department 3) Technical Department 4) Accounts & Finance, 5) Printing & Slitting, and 6) Administration.


Management Team

Mr. Tauseef Ahmed serves as the CEO of the company, leading a team of experienced professionals. Mr. Ahsan Tauseef, his son, holds the position of Director. Mr. Ather, the Chief Financial Officer, brings nearly 37 years of professional experience, including 17 years with the company. Mr. Muhammad Mansoor, Head of Accounts and Finance, possesses 22 years of overall experience, having been associated with the company for the past 5 years. The management team is well-qualified and brings a diverse skill set, contributing to the company’s continued growth and operational excellence.


Effectiveness

Keeping in view the size and operations of the Company, management lacks effectiveness as there are no management committees in place. Thus, indicating room for improvement. Management meets on a need basis to ensure the efficiency of the Business’s operations The senior management holds major control of operations.


MIS

The company utilizes licensed Microsoft Office applications, including Excel, Word, and Outlook, for its operations. Internal MIS reports are generated for senior management on a weekly, monthly, quarterly, and annual basis. However, there is room for improvement in the internal audit department.


Control Environment

SPI’s management has provided forecasts that reflect their strategy and demonstrate the feasibility of their approach. The company intends to continue investing in capital expenditure to improve manufacturing efficiency and enhance its e-commerce capabilities, to cater to the growing market. For internal MIS reports to senior management reports are generated on a weekly, monthly, quarterly, and annually as per the management perusal. However, there is room of improvement for the internal audit department.


Business Risk
Industry Dynamics

The local packaging industry operates in a fragmented landscape and is highly dependent on imported polypropylene and polyethylene resin, making it sensitive to adverse exchange rate movements and global crude oil price trends. Rising energy costs and varying levels of automation and quality standards among manufacturers also influence the overall sector performance. Moreover, the demand side of the packaging sector is closely tied to consumption trends within the fast-moving consumer goods (FMCG) segment, particularly the edible oil and food industries, which directly drive the need for flexible packaging solutions such as plastic pouches, lamination rolls, and tin containers manufactured by SPI. Looking ahead, the packaging sector is expected to benefit from improvements in key macroeconomic indicators, including exchange rate stabilization and a gradual reduction in policy and interest rates. These developments are likely to support industry growth and enhance business sentiment.


Relative Position

Saigal Packages Industries Limited operates in the Plastic and Tinplate packaging segments, manufacturing and distributing packaging materials. Backed by extensive industry experience, the company has developed a solid market reputation, supported by long-term relationships with suppliers, distributors, and a diverse customer base, enhancing its competitive position.


Revenues

During 9MFY25, Saigal Packages Industries (Pvt.) Limited reported a topline of ~PKR 3,227mln, reflecting a ~17.53% (annualized) growth compared to ~PKR 3,661mln in FY24. In FY24, the company's topline was ~PKR 3,661mln, reflecting a ~4.6% growth over FY23's ~PKR 3,500mln. All sales remained domestic, derived from a diverse product portfolio including plastic pouches, tin containers, packaging services, recycled plastic dana, scrap, and fabrication charges.


Margins

In 9MFY25, the company's gross profit margin was ~13.8% , showing an improvement from ~12.7% in FY24. Operating margins also saw an enhancement, reaching ~12.8% in 9M FY25 , up from ~11.6% in FY24. This positive trend in operational efficiency contributed to a higher net profit margin of ~8.8% in 9MFY25 , compared to ~6.6% in FY24.


Sustainability

SPI management has provided forecasts that reflect their strategy and demonstrate the feasibility of their approach. The company intends to continue investing in capital expenditure to improve manufacturing efficiency, to cater to the market.


Financial Risk
Working capital

During 9MFY25, the Company's net working capital days increased to ~33 days , compared to ~27 days in FY24. This change is influenced by inventories averaging ~44 days in 9MFY25 , while in FY24, average inventory days were ~46 days. Trade receivable days for 9MFY25 stood at ~46 days, an increase from ~40 days in FY24. Conversely, trade payable days decreased to ~57 days in 9MFY25 , from ~59 days in FY24.


Coverages

The Company's Free Cash Flows from Operations (FCFO) for 9MFY25 increased to ~PKR 372mln , up from ~PKR 349mln in FY24. The FCFO growth for 9MFY25 was ~41.9% , compared to ~23.4% in FY24. This indicates a strong generation of cash from core operations. The FCFO to Finance Cost ratio also improved to ~139.0 in 9MFY25 , from ~86.9 in FY24. Debt Payback period improved to ~0.8 in 9MFY25 from ~0.5 in FY24.


Capitalization

SPI maintains a low-leveraged capital structure, relying primarily on long-term borrowings obtained for capital expenditure, while day-to-day working capital requirements are managed through internally generated cash flows. 
 
 

Aug-25

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Saigal Packages Industries (Pvt.) 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 1,230 633 490 512
2. Investments 0 0 0 0
3. Related Party Exposure 0 0 0 0
4. Current Assets 1,414 1,347 1,140 821
a. Inventories 521 526 404 241
b. Trade Receivables 725 352 444 376
5. Total Assets 2,644 1,980 1,630 1,333
6. Current Liabilities 919 784 688 412
a. Trade Payables 737 605 585 362
7. Borrowings 245 59 75 139
8. Related Party Exposure 189 129 100 191
9. Non-Current Liabilities 1 1 0 0
10. Net Assets 1,289 1,006 766 591
11. Shareholders' Equity 1,289 1,006 766 591
B. INCOME STATEMENT
1. Sales 3,227 3,661 3,500 2,474
a. Cost of Good Sold (2,782) (3,197) (3,188) (2,304)
2. Gross Profit 445 465 313 170
a. Operating Expenses (32) (41) (38) (34)
3. Operating Profit 413 424 274 136
a. Non Operating Income or (Expense) (5) (27) (18) (8)
4. Profit or (Loss) before Interest and Tax 408 396 257 129
a. Total Finance Cost (4) (5) (10) (17)
b. Taxation (121) (152) (71) (21)
6. Net Income Or (Loss) 283 240 176 91
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 372 349 283 142
b. Net Cash from Operating Activities before Working Capital Changes 368 345 273 126
c. Changes in Working Capital (118) (18) (76) 49
1. Net Cash provided by Operating Activities 250 327 198 175
2. Net Cash (Used in) or Available From Investing Activities (597) (190) (26) (118)
3. Net Cash (Used in) or Available From Financing Activities 246 13 (155) (10)
4. Net Cash generated or (Used) during the period (101) 150 17 47
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) 17.5% 4.6% 41.5% 31.9%
b. Gross Profit Margin 13.8% 12.7% 8.9% 6.9%
c. Net Profit Margin 8.8% 6.6% 5.0% 3.7%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) 7.9% 9.1% 5.9% 7.8%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 32.9% 27.1% 25.9% 16.7%
2. Working Capital Management
a. Gross Working Capital (Average Days) 90 86 76 81
b. Net Working Capital (Average Days) 33 27 27 42
c. Current Ratio (Current Assets / Current Liabilities) 1.5 1.7 1.7 2.0
3. Coverages
a. EBITDA / Finance Cost 165.1 110.1 37.4 19.0
b. FCFO / Finance Cost+CMLTB+Excess STB 28.9 15.8 11.7 2.5
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 0.8 0.5 0.6 2.5
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 25.2% 15.8% 18.6% 35.9%
b. Interest or Markup Payable (Days) 0.0 0.0 0.0 0.0
c. Entity Average Borrowing Rate 1.1% 2.1% 3.2% 2.8%

Aug-25

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Saigal Packages Industries (Pvt.) Limited

rating scale

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Aug-25

www.pacra.com

Saigal Packages Industries (Pvt.) 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.
  2. Restrictions
    1. No director, officer, or employee of PACRA communicates the information acquired by him for use for rating purposes to any other person, except where required under law to do so. (Chapter III; 10-(5))
    2. PACRA does not disclose or discuss with outside parties or make improper use of the non-public information which has come to its knowledge during a business relationship with the customer. (Chapter III; 10-7-(d))
    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
    1. PACRA fulfills its obligations in a fair, efficient, transparent, and ethical manner and renders high standards of services in performing its functions and obligations. (Chapter III; 11-A-(a))
    2. PACRA uses due care in the preparation of this Rating Report. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. PACRA does not, in every instance, independently verify or validate information received in the rating process or in preparing this Rating Report. (Clause 11-(A)(p))
    3. PACRA prohibits its employees and analysts from soliciting money, gifts, or favors from anyone with whom PACRA conducts business. (Chapter III; 11-A-(q))
    4. PACRA ensures before the commencement of the rating process that an analyst or employee has not had a recent employment or other significant business or personal relationship with the rated entity that may cause or may be perceived as causing a conflict of interest. (Chapter III; 11-A-(r))
    5. PACRA maintains the principle of integrity in seeking rating business. (Chapter III; 11-A-(u))
    6. PACRA promptly investigates in the event of misconduct or a breach of the policies, procedures, and controls, and takes appropriate steps to rectify any weaknesses to prevent any recurrence, along with suitable punitive action against the responsible employee(s). (Chapter III; 11-B-(m))
  4. Independence & Conflict of Interest
    1. PACRA receives compensation from the entity being rated or any third party for the rating services it offers. The receipt of this compensation has no influence on PACRA’s opinions or other analytical processes. In all instances, PACRA is committed to preserving the objectivity, integrity, and independence of its ratings. Our relationship is governed by two distinct mandates: i) rating mandate - signed with the entity being rated or issuer of the debt instrument, and ii) fee mandate - signed with the payer, which can be different from the entity.
    2. PACRA does not provide consultancy/advisory services or other services to any of its customers or their associated companies and associated undertakings that are being rated or have been rated by it during the preceding three years, unless it has an adequate mechanism in place ensuring that the provision of such services does not lead to a conflict of interest situation with its rating activities. (Chapter III; 12-2-(d))
    3. PACRA discloses that no shareholder directly or indirectly holding 10% or more of the share capital of PACRA also holds directly or indirectly 10% or more of the share capital of the entity which is subject to rating or the entity which issued the instrument subject to rating by PACRA. (Chapter III; 12-2-(f))
    4. PACRA ensures that the rating assigned to an entity or instrument is not affected by the existence of a business relationship between PACRA and the entity or any other party, or the non-existence of such a relationship. (Chapter III; 12-2-(i))
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  5. Monitoring and Review
    1. PACRA monitors all the outstanding ratings continuously, and any potential change therein due to any event associated with the issuer, the security arrangement, the industry, etc., is disseminated to the market immediately and in an effective manner after appropriate consultation with the entity/issuer. (Chapter III; 17-(a))
    2. PACRA reviews all the outstanding ratings periodically on an annual basis. Provided that public dissemination of annual review and in an instance of change in rating will be made. (Chapter III; 17-(b))
    3. PACRA initiates an immediate review of the outstanding rating upon becoming aware of any information that may reasonably be expected to result in downgrading of the rating. (Chapter III; 17-(c))
    4. PACRA engages with the issuer and the debt securities trustee to remain updated on all information pertaining to the rating of the entity/instrument. (Chapter III; 17-(d))
  6. Probability of Default
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Aug-25

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