PACRA Maintains Entity Ratings of Shujabad Weaving Mills Limited
The ratings reflect adequate business profile of Shujabad Weaving Mills Limited (‘Shujabad Weaving’ or ‘The Company’). The Company’s share of local sales further grew in its sales mix due to better fabric prices in the domestic market, as exports decreased. Revenues showed limited growth, with margins improving moderately. The Company’s stretched financial profile exhibits its highly leveraged capital structure. The working capital cycle of the Company has increased in recent years, though stands in line with industry average. Cash flow from operations and coverages improved, albeit remaining adequate. Going forward, higher interest rates are expected to put pressure on the Company's financial profile. The Company’s association with Shujabad Group provides comfort to the ratings.
The ratings are dependent upon continued sponsor support, better governance structure and management's ability to improve margins and profitability. Keeping the debt levels manageable and strengthening coverages remains critical.
Shujabad Weaving Mills Limited was incorporated in 2005 as a public unlisted company. The Company has a nominal share in local weaving industry with 250 looms. The total energy requirement of the Company stands at 8.9MW, which is met through a mix of captive plant and backup MEPCO connection. The Company is owned by three families. Major stake rests with Wahid family (39.7%), followed by Shabbir family (35.4%) and Akram family (25%).
Board of Directors consists of four members. All of them are serving as executive directors, with Mr. Abdul Wahid as Chairman of the board. Two directors represent Shabbir family, including the CEO, Mr. Qaisar Shabbir. The remaining two families have one representative each. Both the Chairman and the CEO have extensive experience in the textile sector, ensuring efficient decision making.