PACRA Assigns Preliminary Ratings to Beacon Impex (Pvt.) Limited - PPSTS - PKR 1.0bln - TBI

The ratings reflect Beacon Impex (Pvt.) Limited's ("the Company" or "Beacon Impex") entrenched position in the dedicated bodywear segment, supported by a decade of vertical integration and sustained capacity expansion. The Company operates as a fully integrated textile manufacturer with in-house facilities spanning spinning, knitting, elastic, dyeing and processing, cutting, and garment manufacturing, primarily focused on bodywear, notably boxers and briefs. A globally recognized client portfolio, led by Puma, Hugo Boss, Levi's, and Amazon, provides strong revenue visibility and supports long-term sustainability. The topline expanded materially by 45.1% in FY25, driven by demand and export volumes, with momentum continuing into 1HFY26. Revenue remains export-led, with Europe as the primary market, followed by North America and Asia, offering partial insulation from US tariff measures while positioning the Company to benefit from evolving global sourcing trends. Although rising Middle East tensions and trade route uncertainty across the Arabian Sea present broader sectoral risks, the Company’s exposure remains limited. Shipments are executed on an FOB basis, insulating margins and working capital from logistical implications. The financial risk profile remains adequate. FCFO remained stable in FY25, while EBITDA-based coverage improved to ~4.4x (FY24: 3.7x). FCFO-based coverage also strengthened amid monetary easing. Gearing increased but remains supported by a growing equity base and lower borrowing costs. The Company maintains ample headroom within sanctioned limits, providing flexibility for incremental funding. It also benefits from subsidized financing under SBP’s LTFF and ERF/EFS schemes, structurally lowering borrowing costs and supporting debt servicing capacity. While net working capital days improved in FY25, the cycle observed some stretch in 1HFY26, increasing to ~92 (FY25: 63; FY24: 66), primarily reflecting higher inventory and receivables levels. To support working capital needs arising from export-intensive operations, the Company plans to access capital markets through a Rated, Secured PPSTS of PKR 1,000 million, structured on Musharakah. The instrument is secured by a ranking charge over current assets, with a DPA ensuring full principal availability ahead of maturity. Principal is repayable in bullet at maturity, with profit payable quarterly.
Maintenance of the debt instrument rating is contingent upon the Company’s sustainment of revenue growth momentum. Preservation of adequate coverage metrics, particularly FCFO-based debt servicing capacity, alongside disciplined working capital management, remains central to the rating. Any material increase in leverage beyond current levels without commensurate cash flow strengthening or deterioration in the export client base would exert downward pressure on the assigned rating.

About the Entity
Beacon Impex (Private) Limited ("the Company" or "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 Board comprises two members, including the CEO, supported by a qualified management.

About the Instrument
Beacon Impex is to issue Rated, Secured, Privately Placed Short-Term Sukuk carrying a markup of 06 Month KIBOR + 100bps with a tenor of 06 months, to finance the working capital requirements of the Company. The instrument is secured by a ranking charge over the Company's current assets, with a Debt Payment Account (DPA) maintained under the lien of the Investment Agent, pre-funded in tranches of PKR 250mln, 15days before maturity, PKR 250mln 05days before maturity and PKR 500mln two days before maturity, ensuring full principal availability ahead of the maturity date. Principal is repayable in bullet at maturity and profit is payable quarterly.