PACRA Assigns Initial Ratings to Nishat Mills Limited | PPSTS | PKR 5.0bln | Nov-25

Nishat Mills Limited (“NML” or “the Company”) is a leading name in Pakistan’s textile industry, recognized for its large-scale operations and appreciable global presence. As a fully integrated textile enterprise, NML operates across the entire textile value chain—from high-end spinning to value-added finished products. It serves as the flagship company of the Nishat Group and is guided by a clear vision to safeguard stakeholders’ interests, drive industry leadership, and contribute meaningfully to the national economy. The Company adheres to a strong governance framework, upholds high standards of transparency, and benefits from a well-versed management team focused on the sustainable growth.
NML offers a diverse range of products, including yarn, grey cloth, processed fabric, towels and bathrobes, made-ups, and garments. Its topline is primarily export-driven, with a significant portion generated from the domestic market. The Company enjoys a well-established and stable global clientele, with exposure across America, Africa, Asia, and Europe.
Over the years, the Company’s topline has shown consistent growth, supported by cutting-edge production mechanisms and ongoing BMR activities. This drove a higher volume offtake, positively reflecting on the business profile. In 1QFY26, NML achieved a topline of PKR 45.0bln (FY25: PKR 178.1bln; FY24: PKR 160.2bln). The gross profit margin was sustained through disciplined cost optimization, driven by the strategic investment in cost-efficient energy alternatives. Overall profitability was further reinforced by strong returns from the investment portfolio, including capital market placements and strategic equity investments. The ease in finance costs was partially offset by operational pressures, securing a bottom line of PKR 772mln (FY25: PKR 6.0bln; FY24: PKR 6.3bln).
The Company has maintained a strong financial risk profile, albeit with a leveraged capital structure. This is supplemented by a healthy liquidity position, underpinned by a substantial investment parked in equity instruments. Working capital requirements are met through a combination of internally generated cash flows and short-term borrowings. Coverage indicators have shown modest recovery, a trend expected to continue in the upcoming quarters. Ratings take comfort from the robust financial strength and long-standing operational track record of the sponsors, operating in twelve major sectors of the country’s economy.
The ratings are dependent on the Company's ability to sustain business growth while generating sufficient cash flows and maintaining sound credit quality metrics. The adherence to the debt matrix at an optimal level is a prerequisite for the assigned ratings.

About the Entity
NML is a public limited Company established in 1951. The Company’s majority stake (~51%) is owned by the Mansha family through individuals and group companies. The board comprises seven members with two directors representing the sponsoring family, including the Chairman, Mr. Hassan Mansha and the CEO, Mr. Umer Mansha.

About the Instrument
NML issued a privately placed, unsecured, non-convertible shariah-compliant short-term sukuk or Islamic commercial paper of PKR 5.0bln in November 2025. The tenor of the instrument is six months from the date of issue. It carries a profit rate of 3M Kibor + 05 bps. The purpose of the instrument is to finance the working capital requirements of the Company. It has a call option, exercisable after three months of the issue date, following a 5-day prior notice. Once issued, the call option is irrecoverable.