PACRA Maintains the Entity Ratings of Masood Spinning Mills Limited

The assigned ratings of Masood Spinning Mills Limited (“MSML” or “the Company”) are underpinned by the Company’s formidable presence within the competitive textile landscape. Over the years, the Company has strengthened its foothold through sustained operations and product diversification, meeting the requirements of its top clientele. The Company is engaged in the manufacturing and sale of multiple categories of yarn, fabric and socks. Lately, the Company has ventured into high potential socks segment, offering attractive margins. The socks segment offers a broader range of socks, including fashion wear, medicated socks, sports wear, and formal wear. This initiative was undertaken to capitalize on the rising demand for value-added products in the international market. The operational efficiency of this new unit has now been fully realized.

During 1QFY26, the Company achieved a topline of PKR 8.1bln (1QFY25: PKR 6.7bln). This growth was primarily driven by the management’s deliberate shift towards a more sustainable and profit-centric strategy, rather than a sole reliance on volume expansion. Consequently, the Company’s sales mix tilted towards the domestic market to reap benefits from the favorable product pricing dynamics. Additionally, the revenue from the socks segment demonstrated a notable growth. Margins remained largely intact, supported by the optimization of the overall cost structure via strategic investment in cost-efficient energy alternatives. As of today, a 13.5MW solar project is fully operational. These factors translated into improved net profitability, with PAT reaching PKR 94mln (1QFY25: PKR 52mln).

The Company finances its working capital requirements through internal cash generation and short-term borrowings. The Company maintains an adequate financial risk profile, with cash flows and coverages within a manageable range. The management is cognizant of the existing debt levels and has articulated defined strategies to gradually deleverage the Company’s balance sheet in the future.
The ratings are contingent upon the Company’s ability to achieve sustainable topline growth while maintaining its profitability matrix at an optimal level. The generation of sufficient cash flows and improvement in coverage indicators remain critical. Adherence to an adequate debt matrix is a key prerequisite for the assigned ratings.

About the Entity
Masood Spinning Mills Limited operates under the umbrella of the Mahmood Group. The sponsoring family owns the entire stake through individual holdings and associated companies. Overall control of the board is vested with six members. Mr. Khawaja Muhammad Ilyas is the CEO of the Company and has over four decades of experience. He is supported by a team of seasoned professionals.