PACRA maintains the Entity Ratings of Masood Textile Mills Limited

The ratings of Masood Textile Mills Limited ('MTM' or 'the Company') underscore its prominent and well-entrenched business profile within Pakistan's value-added textile sector. MTM operates as a vertically integrated textile manufacturer, with state-of-the-art production infrastructure spanning the entire textile value chain. The operations encompass Spinning, Knitting, Yarn and Fabric Dyeing, Laundry, Printing, Embroidery, and Apparel Manufacturing. The operations are underpinned by rigorous quality control standards calibrated to the exacting requirements of globally recognized international fashion and retail brands. Business stability is firmly reinforced by MTM's long-standing partnerships with a well-diversified clientele of financially robust international brands, including JCPenney, Hugo Boss, Scotch & Soda, Foot Locker, and Quiksilver, with the garments segment constituting about 81.4% of total revenues. Such long-standing relationships with globally recognized brands distinguish the Company from its industry peers in terms of reliability and market positioning, providing comfort to the assigned ratings.
MTM’s revenue for FY25 stood at PKR 59.2bln, reflecting a YoY growth of 1.0% (FY24: PKR 58.7bln), with 9MFY26 revenues at PKR 36.4bln, indicating stable growth in operational performance. The Company reported a turnaround in profitability, posting a PAT of PKR 131mln (FY24: PKR 470mln loss), primarily driven by a 22.8% reduction in finance costs amid monetary easing. As of 9MFY26, profitability further strengthened to PKR 603mln (9MFY25: PKR 319mln loss), reinforcing the Company’s improved earnings trajectory. The Company has shifted its focus to European markets, targeting high-end fashion clients to improve margins. Consequently, the Company’s profitability profile improved in nine months with gross and net margins expanding to 17.6% and 1.7%, respectively, reflecting gradual margin accretion driven by enhanced cost rationalization measures and improved operational efficiencies. MTM installed 6.4MW of solar capacity during FY25 with an additional 3.8MW in the pipeline, supplementing cost optimization and energy efficiency.
The Company’s financial risk profile is considered stable, supported by optimal working capital management. Cash flows remain sufficient with moderate coverage. MTM's net working capital requirements are primarily met through short-term borrowings and internally generated cash flows. Masood Textile maintains a leveraged capital structure, mainly skewed towards short-term borrowings. Long-term conventional financing is used to fund CAPEX in the textile value chain over the years.
The ratings are dependent upon the improvement in profitability while expanding business volumes. The efficient utilization of short-term borrowings to induce growth in sales plays a pivotal role. Adherence to the debt matrix while generating sufficient cash flows and maintaining coverages at an optimal level is a prerequisite for assigned ratings

About the Entity
Masood Textile Mills Limited ('MTM' or 'the Company') is a public listed company incorporated in 1984. The Company’s board comprises of seven members, including the CEO - Mr. Shahid Nazir Ahmad, the Chairman of the board - Mr. Naseer Ahmad Shah, two independent directors, two nominee directors from Shanghai Challenge Textile Co. Limited, and one from NIT. They are supported by well-qualified management.