PACRA Maintains the Entity Ratings of Kassim Textiles (Pvt.) Limited

The assigned ratings of Kassim Textiles (Pvt.) Limited (“the Company” or “KTL”) derive their rationale from the Company’s position within the competitive textile landscape. The Company operates a fully integrated textile setup encompassing ginning, spinning, and weaving, with a production capacity of 30,624 spindles, 3,304 rotors, and 364 looms. KTL maintains a diversified product portfolio comprising a wide range of fabrics and yarns with counts ranging from 6s to 16s, including specialized dyed yarn. Over the years, the Company has established a stable and diversified customer base, thereby supporting revenue growth and business sustainability.

The Company continues to achieve a significant growth in its topline (FY24: PKR 31.2bln; FY23: PKR 22.2bln), driven by notable volume expansion to meet the rising demand in the international market. In terms of revenue contribution, the fabric segment remains the largest contributor, outperforming other business lines, followed by the spinning segment. Indirect exports continue to be entirely generated through fabric sales. The Company’s margins are gradually improving due to the optimization of the overall cost structure. This is supported by several investments in cost-efficient energy alternatives. Non-core income generated from the deployment of surplus funds further strengthens the profitability matrix. However, these benefits are partially offset by elevated finance costs and the transition of the taxation regime from the Final Tax Regime (FTR) to the Normal Tax Regime (NTR) for export-oriented units. Despite these pressures, the Company’s bottom line reflects an improvement (FY24: PKR 700mln; FY23: PKR 391mln).

The Company finances its working capital requirements through internal cash generation and short-term borrowings. The financial risk profile is considered adequate, characterized by a leveraged capital structure and stretched working capital management. However, the coverage metrics have shown modest recovery, supported by improved cash flows.
The ratings are dependent on the Company's ability to sustain its business profile by maintaining profitability and margins, while expanding business volumes. Any deterioration in the financial risk profile will have a negative impact on the assigned ratings.

About the Entity
Kassim Textiles (Pvt). Limited was incorporated on August 27, 1991, as a private limited Company. As the flagship entity of the Machiyara Group, it operates a modern weaving unit that manufactures denim fabric for both the local and international garment industries. The entire shareholding of the Company is held by the Kassim family through individual shareholdings. The major stake is held by Mr. Muhammad Shabbir (48.81%) and Mr. Amanullah Kassim (49.99%). The remaining shares are owned by Mr. Arsal Shabbir Khanani (1.18%), Ms. Nasreen Shabbir (0.01%), and Ms. Seema Amanullah (0.01%). The Company has a sponsor-dominated board comprising four members. The position of Chairman and CEO is vested with Mr. Muhammad Shabbir. He possesses textile expertise and has a future-oriented perspective for the Company. He has been associated with the Company for over three decades. He is assisted by a team of highly qualified and seasoned professionals.