PACRA Maintains Entity Ratings of Maksons Textile (Pvt.) Limited

The ratings account for financial strength of the company's sponsors - AL-Tariq Group; having expertise in textile engineering. This provides cushion to relatively stretched financial risk profile of Maksons, characterized by high leveraging and adequate debt servicing ratio. Free cashflows, though small in size, demonstrated stable and rising trend. The country’s textile exports improved by ~9% in FY18 on the back of bailout package from the government and recent devaluation of rupee. This benefitted the company’s topline of which exports constitute 95%. Company caters to niche market in textile industry providing textile solutions in the form of semi-finished and finished fabrics; reflecting well in gross margins. Company's bottomline, though small in size, has remained stable over years. With latest BMR activities, the company is expected to bring efficiencies and growth, going forward.

The ratings are dependent on rationalization of top ten client concentration, with anticipated growth in topline. Risk absorption capacity would improve with scheduled repayments easing out leveraged capital structure. Maintaining adequate debt services coverage remains critical.

About the Entity
Maksons Textile Private Limited (Maksons) incorporated in 2000, is a modern weaving unit specializing in greige fabrics, processed fabrics, made-ups, including home textile. The mill is presently a state of the art weaving unit with an installed capacity of 114 weaving looms including AIRJET & SULZER. Shareholding is held equally by a group of four individuals. The company belongs to Al-Tariq Group, specializing in textile engineering, and having chain of companies involved in construction, trading, textile and power generation.

Company produces three kinds of fabrics; (i) Greige fabrics - 100% cotton and polyester cotton mix. This fabrics is used in production of various items including bedsheets, curtains, lining, pocketing, pillow covers and garment, (ii) Flanned Fabrics, a soft woven fabric is usually made from cotton. This is used in making of tartan, men’s pajamas, women sleep wear and scarves, (iii) Made-ups; bedsheets, pillow covers, curtain linings, pocketing’s, garments.

Maksons Textile’s Board comprises four members, all are sponsors. The position of chairman is held by Mr. Abdul Quddoos whereas Mr. Khalid Majeed is the CEO of the company; both are sponsors. The day to day operations are run by Director - Mr. Muhammad Khalid, whereas the CEO assumes more of monitoring role and also resolves the financial & banking issues.