Bikiya Industries (Pvt.) Limited

RATING REPORT | Apr-26

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
03-Apr-26 BB+ A3 Stable Maintain -
03-Apr-25 BB+ A3 Stable Upgrade -
03-Apr-24 BB A3 Stable Maintain -
03-Apr-23 BB A3 Stable Maintain -
14-Sep-22 BB A3 Stable Initial -
About the Entity

Bikiya Industries Private Limited was founded in 2014 with an initial share capital of PKR 50 million. Mr. Saleem Bikiya holds an 80% stake, while his sons, Mr. Usman Bikiya and Mr. Muhammad Bilal, each own 10%. The Company specializes in five key products: i) Pop-up Tissue Box, ii) Toilet Roll, iii) Pop-up Mini Tissue, iv) Hand Towel, and v) Party Pack, catering to a broad customer base. The Board of Directors (BoD) consists of three members, with Mr. Saleem Bikiya serving as the Chairperson.

Rating Rationale

The rating of Bikiya Industries (Pvt.) Limited (“Bikiya” or the “Company”) reflects the Company’s stable operational performance and its ability to sustain a profitable business profile. The Company is a privately owned, family-run enterprise led by its majority shareholder and CEO, Mr. Muhammad Saleem Bikiya, who possesses over four decades of industry experience. His strong business acumen and active involvement in the Company’s strategic and operational affairs have played a key role in maintaining the Company’s market positioning and ensuring operational stability. Bikiya Industries primarily operates in the tissue paper segment, where its flagship brand “TUX” has established a notable presence within a relatively short period. Alongside its core tissue product line, the Company has introduced a range of food products as part of its strategic initiative to broaden its product mix and enhance revenue streams. This move reflects management’s commitment to strengthening its market presence by expanding into complementary segments while addressing changing consumer preferences. The Company benefits from a well-integrated supply chain, supported through its dedicated intender, International Business Management, which facilitates the procurement of raw materials and contributes to operational efficiency. The demand outlook for tissue products in Pakistan remains favorable, supported by increasing consumer awareness regarding hygiene and steady household consumption. However, the sector remains exposed to fluctuations in raw material prices and exchange rate volatility, as a portion of the raw materials is imported. The Company’s established sourcing channels and operational management provide some cushion against these challenges. Financially, Bikiya Industries has maintained a sound performance profile. The Company’s operations have translated into a stable profitability position, supported by effective cost management despite inflationary pressures and volatility in raw material prices. The Company maintains a low leveraged capital structure, which, coupled with stable operational performance, supports its overall credit profile and bodes well for the assigned rating.

Key Rating Drivers

The ratings would remain dependent on the Company's ability to sustain the growth in the profitability while strengthening the equity base. Prudent management of the working capital and maintaining sufficient cash flows and coverages are essential for the ratings. Any significant change in margins and coverages will impact the ratings.

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

Bikiya Industries (Pvt.) Limited


Rating Analysis

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Profile
Legal Structure

Bikiya Industries (Pvt.) Limited ("BIL" or the “Company”) was established in 2014 under the Directorship of Mr. Muhammad Saleem Bikiya.


Background

The Company was established to manufacture tissue papers. The Company is among the top five manufacturers of tissue paper with the brand name "TUX".


Operations

The Company’s head office is located in Karachi. Bikiya Industries (Pvt.) Limited (BIL) operates across five main product lines: (i) Pop-up Tissue Box, (ii) Toilet Roll, (iii) Pop-up Mini Tissue, (iv) Hand Towel, and (v) Party Pack. The Company sources its raw materials from China, Indonesia, and Malaysia and distributes its products across the northern, central, and southern regions of Pakistan. All sales are conducted directly, without involving any dealers. As of June 2025, approximately 55% of the customer base is concentrated in the central region, 29% in the northern region, and 16% in the southern region. The top-selling product remains Tissue, contributing 95% of total revenue, followed by Paper Cups (4%) and Ispaghol (1%).


Ownership
Ownership Structure

Bikiya Industries (Pvt.) Limited is privately held by three shareholders: Mr. Muhammad Saleem Bikiya, who owns 80% of the shares, and Mr. Usman Saleem Bikiya and Mr. Muhammad Bilal, each holding 10%. Mr. Muhammad Saleem Bikiya serves as the head of the family, with Mr. Usman Saleem Bikiya and Mr. Muhammad Bilal being his sons.


Stability

Mr. Saleem Bikiya exhibits a strong financial commitment during critical periods. The group companies Bikiya Industries, Madiha International, and International Business Management support each other by extending long-term loans as and when required.


Business Acumen

The directors associated with the Company have an extensive knowledge of the business practices and Company processes, being associated with the Company for 12 years. The Major shareholder/Director Muhammad Saleem Bikiya has an overall experience of 41 years. The other two shareholders/directors have an accumulative experience of 11 years each.


Financial Strength

The Company operates on a light-asset, high-turnover business model, which has enabled it to strengthen its market presence and establish its brand among the leading importers of paper and related products in the southern market.


Governance
Board Structure

The Board of Directors (BoD) of the Company comprises three members, all of whom are also the principal sponsors of the organization. The Board is headed by Mr. Saleem Bikiya, who serves as the Chairperson and is responsible for providing strategic oversight and guiding the overall governance of the Company.


Members’ Profile

The majority owner/director Mr. Muhammad Saleem Bikiya has an extensive experience of 40 years in paper industry while Mr Usman Saleem and Muhammad  Bilal has 11 Years overall experience.


Board Effectiveness

The Board currently comprises three members. Despite its limited size, the Board has constituted two committees, namely (i) the Audit Committee and (ii) the Human Resources and Remuneration Committee, both chaired by Mr. Usman. However, given the relatively small size of the Board, the overall governance framework remains comparatively weak when benchmarked against established corporates, indicating scope for further strengthening.


Financial Transparency

The Company has appointed Shahid Hussain & Co., Chartered Accountants, as its external auditors. The auditors have issued an unqualified opinion on the financial statements of Bikiya Industries (Pvt.) Limited for the year ended June 30, 2025. However, the audit firm is not QCR-rated, indicating potential room for further strengthening the Company’s corporate governance framework.


Management
Organizational Structure

Bikiya Industries (Pvt.) Limited has established a structured organizational framework aligned with its operational requirements. The structure is primarily organized into five key functional departments: (i) Sales & Marketing, (ii) Production, (iii) Procurement, (iv) Accounts & Finance, and (v) Collection & Recovery.


Management Team

Mr. Muhammad Saleem Bikiya is the CEO of the Company. He is experienced business person with an experience of more than 4 decades in the relevant field. He is working with the biggest groups in the paper industry including sinarmas group Indonesia known as Asia Pulp & Paper Mr. Farrukh Ejaz previously served as the Chief Financial Officer (CFO) of the Company; however, he has recently resigned from the position. Currently, Mr. Fahad Abdul Rehman is performing the role of Acting CFO. He is primarily employed with the Company as Deputy Manager Finance and continues to support the Company by providing assistance on financial matters. Mr. Faisal Rehan serves as the HR Manager of the Company. He possesses approximately six years of total professional experience and has been associated with the Company for the past three years. Mr. Nauman Ali serves as the Head of Sales at the Company. He possesses approximately 15 years of overall professional experience and has been associated with the Company for the past two years.


Effectiveness

The sponsors’ extensive industry experience, coupled with the support of a professional management team, has enabled the Company to effectively manage and organize its operations. Nevertheless, the establishment of formal management committees could further enhance managerial effectiveness and operational oversight.


MIS

For the preparation of MIS and operational reports, the Company utilizes SAP Business ERP software.


Control Environment

There is no internal audit, the absence of an internal audit department can leave an organization exposed to a variety of risks that could harm its financial standing, reputation, and overall operational effectiveness.


Business Risk
Industry Dynamics

Pakistan’s packaging industry consists of four major segments, paper, plastic, tinplate and glass. Paper and plastic segments occupy the major share in total market. Over FY21–FY25, the Paper Packaging segment has remained largely stable in terms of production levels. Growth is supported by rising demand for sustainable packaging and tighter environmental regulations, including EPR, which favor recyclable fiber-based materials. Advances in barrier coatings (e.g., bio-based and nano-cellulose) are improving paper’s functional performance, while digital printing and small-batch production are enhancing supply-chain flexibility and boosting the appeal of customized paper packaging solutions. The production level of Paper over the last five years has a CAGR of ~3.5%. This reflects the stable demand of the segment as it makes up a significant portion of overall Paper and board production. The production of Paper decreased marginally by ~2.9% YoY in FY25 to ~355,513MT from ~366,267MT in FY24. Production declined to ~54,435MT as of 2MFY26 (2MFY25: ~61,464MT). (Source: PACRA Sector Study)


Relative Position

As per managment representation, Bikiya Industries (Pvt.) Limited maintains a good market presence in Pakistan for importing tissue paper and hold's a significant share in tissue paper product. Amongst the larger players in the tissue paper industry and market size of ~ 23000 tons/Annum, Bikiya falls under the top five convertors of tissue papers.


Revenues

The Company’s top line has shown a downward trend due to sale prices. However, the rise in product prices has negatively impacted demand. For FY25, The Company recorded a decline of approximately 68% in revenue compared to the previous year.


Margins

The tissue paper rolls used by the Company are 100% imported, and to protect its margins, the Company passes on the increased costs to its B2B consumers. In FY25, both the gross margin (GM) and operating profit margin (OPM) declined compared to FY24. The gross profit margin decreased from approximately 20.2% in FY24 to 12.7% in FY25, while the operating profit margin dropped from 11.8% to 6.7%. As a result, the net profit margin also decreased from around 7.7% to 1.0% during the same period.


Sustainability

The Company is operating at ~84% capacity and has a plan to expand its operations further to capture more market share. The brand name "TUX" has already gotten renowned in the market and has established its foot marks.


Financial Risk
Working capital

Bikiya Industries (Pvt.) Limited experienced a incline in inventory days, from ~50 days at end-Jun24 to ~253 days at end-Jun25. Inventory days are on the higher side because the Company has imported raw materials in huge quantities due to the rise in raw material prices and currency rate fluctuations. The trade receivable days also increased significantly from ~65 days to ~150 days during the same period. Likewise, the trade payable days increased from ~15 days at the end of FY24 to ~50 days at the end of FY25. Consequently, the Company’s net working capital days increased significantly to ~353 days at the end of FY25 from ~100 days at the end of FY24.


Coverages

In FY25, the Company’s EBITDA declined by approximately 125% compared to the previous year, turning negative. Consequently, the Company’s FCFOs also decreased by approximately 133% year-on-year, reflecting a significant deterioration in cash flow generation.


Capitalization

The Company has a low-leveraged capital structure. Long-term debt is related to expansion activities. Its gearing ratio has increased from ~14.8% at the end of FY24 to ~42.9% at the end of FY25 due to an increase in LTB.


 
 

Apr-26

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Bikiya Industries (Pvt.) Limited


Rating Scale

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Apr-26

www.pacra.com

Bikiya 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))
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    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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  6. Probability of Default
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Apr-26

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