PACRA Maintains Entity Ratings of Beacon Impex (Pvt.) Limited

The assigned rating 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. The Company operates a state-of-the-art manufacturing facility equipped with modern machinery that adheres to high-end international standards. It has achieved significant automation across the textile value chain and maintains a congenial working environment for its labor force. Additionally, the Company has developed an automated, centrally integrated dashboard system based on key performance indicators (KPIs) to monitor real-time facility performance and identify process inefficiencies. The implementation of RFID and barcode-based backtracking systems has enabled end-to-end product traceability through a single scan, thereby strengthening the Company’s overall control environment. 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 coverage. Net working capital requirements are primarily financed through short-term borrowings, supplemented by internally generated cash flows. To diversify its funding base, the Company has recently initiated the issuance of commercial paper. 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 ratings are dependent on the Company's ability to sustain its business profile while maintaining its profitability matrix at an optimal level. The sustainability of margins and improvement in coverages while expanding business volumes remain critical. The compliance with corporate governance will be further strengthened by the inclusion of an independent oversight function. Adherence to the debt matrix at a moderate level is a prerequisite for assigned ratings

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.