PACRA Assigns Preliminary Ratings to Beacon Impex (Pvt.) Limited PKR 1bln Sukuk | TBI

The ratings of Beacon Impex Pvt. Limited (“the Company” or “Beacon Impex”) reflects its prominent position in Pakistan’s textile sector, particularly as a trailblazer in the specialized underwear/bodywear segment. The Company operates as a fully vertically integrated knitwear garments manufacturer, with in-house processes encompassing the entire textile value chain—including spinning, knitting, elastic production, dyeing, processing, cutting, and garment assembly. Bodywear garments form the cornerstone of the Company’s product portfolio, with boxers and briefs occupying a dominant share in its sales composition. Beacon Impex’s clientele comprises globally recognized brands, with Puma leading the revenue contribution in FY24, followed by Hugo Boss, Levi’s, and Amazon. The Company's top line grew by 29.5% in 1HFY25, reaching PKR 23,479mln (FY24: PKR 36,274mln), primarily driven by improved business volumes. Beacon Impex is an export-oriented company, as evidenced by its sales mix, with Europe being its primary export destination. The Company's gross margins have declined, primarily due to raw material prices, inflation, wages increase, and a steady USD conversion rate. The Company's financial risk profile is considered good, supported by optimal working capital management. Despite a dilution in operating profit, cash flows remain sufficient with moderate coverages. Net working capital requirements are primarily financed through short-term borrowings, supplemented by internally generated cash flows. The Company intends to issue commercial paper to diversify its funding base and supplement its working capital requirements. Beacon Impex maintains a leveraged capital structure, with approximately 58.0% of its debt comprising STB, while the remaining debt primarily consists of long-term conventional loans used to fund CAPEX in the textile value chain over the years. Textile exports to the US totalled USD 4.02bln in FY24 and USD 2.83bln during 8MFY25. Recently, the US announced the imposition of a flat 29.0% trade tariff on Pakistan; however, its implementation has been deferred for 90 days. The Company maintains approximately 20% exposure to the US market
The underlying instrument is secured by a ranking charge over the Company’s current assets. The Issuer must maintain a Debt Payment Account (DPA) under the lien of the Investment Agent. Payments will begin 60 days before maturity and continue fortnightly to ensure the full issue amount is available in the DPA five days before maturity. Principal repayment will be made in a bullet payment and profit will be paid quarterly

About the Entity
Beacon Impex commenced operations in 2005. The majority shareholding lies with the Company's CEO, Mr. Muhammad Shakeel Faridi, the director, Mr. Mudassar Zafar, and other sponsors. The Company has a capacity of ~7.4mln garments per month and knitted products. The Board comprises two BoDs, including the CEO, Mr. Muhammad Shakeel Faridi, and Mr. Mudassar Zafar

About the Instrument
Beacon Impex is set to issue Rated, Secured, Privately Placed, Short-Term Sukuk, carrying a markup of 6MK+1.50%-2.00% with a tenor of 06 months. The purpose of the instrument is to finance the working capital requirements of the Company