PACRA Maintains Entity Ratings of E-Vision Manufacturing Limited

The ratings reflect E-Vision Manufacturing Limited's ("the Company" or "E-Vision") adequate business profile and its established position in the recycled polyester staple fiber (r-PSF) industry. The Company has carved a niche in the textile sector by producing high-quality white, black, and green recycled polyester staple fiber and polyester chips from post-consumer polyethylene terephthalate (PET) bottles. Currently, the global market is experiencing a rapid shift from virgin to r-PSF and according to management, various global environmental authorities are advocating for the use of r-PSF over virgin PSF due to its lower energy consumption during manufacturing, minimal depletion of natural resources, and approximately ~20% lower cost compared to virgin polyester fiber. The local polyester industry continues to face significant challenges, primarily due to the availability of imported polyester, which is more cost-competitive than domestically produced alternatives, and a slowdown in offtake from the textile sector. In CY24, domestic production of Polyester Staple Fiber (PSF) declined by ~10%. This decrease was largely offset by a corresponding 10% increase in imports, with imported PSF now constituting around 43% of total local demand. During the 9MFY25 review period, the total quantity of textile and related commodity exports stood at ~1,392,395 MT, down from 1,455,242 MT in the same period last year (SPLY), reflecting a decline of ~4.31%. However, in value terms, exports increased by 9.38%, reaching ~USD 13,613 million, indicating improved unit prices or a shift toward higher-value textile products. In CY24, the Company reported revenue of ~PKR 1,438 million, reflecting a modest year-on-year decline of 4.5%. This decrease occurred despite a 14% increase in sales volumes, as the Company faced significant pricing pressure. Average selling prices declined by ~18% compared to the previous year. The unfavorable pricing environment offset volume-driven gains and resulted in slight margin compression across all levels. To combat this pricing challenge, the Company is strategically focused on improving the quality of its recycled polyester staple fiber (r-PSF) and has committed a sizeable CAPEX toward this initiative. This investment is expected to enhance both price realization and sales volumes in the domestic market, while also facilitating the expansion of the Company’s export footprint across the Asia-Pacific region. The financial risk profile of the Company is supported by adequate coverages, cashflows, and a stretched working capital cycle. Capital structure is leveraged, where borrowings are mainly comprised of short-term for working capital management.
The ratings hinge on sustainable revenue growth and margin improvement. Moreover, it is essential to maintain a robust capital structure consistent with the financial projections. Looking ahead, improvements to the Company's governance framework, control environment, and external audit function by engaging auditors which are included in SBP’s panel of auditors would be viewed positively.

About the Entity
E-Vision Manufacturing Limited is a public, unlisted entity incorporated in 2013. The Company is engaged in the manufacturing and regeneration of polyester staple fiber with a gross production capacity of 60 tons per day. The Company’s shareholding is structured through Marylebone Management Limited (MML), an offshore investment company incorporated in the British Virgin Islands. MML is wholly owned by IDL Investments, which holds a 60% stake in E-Vision. The remaining 40% stake is held by Mr. Abdul Ghaffar, the Company’s Chief Executive Officer. IDL Investments itself is wholly owned by Mr. Kashif Naseem Afzal.