PACRA maintains the ratings of Tata Textile Mills Limited

The ratings reflect Tata Textile Mills Limited’s (“Tata Textile" or "the Company") strong positioning within Pakistan’s textile spinning industry, supported by its sizeable operational footprint, diversified customer base, and experienced management team. The Company ranks among the country’s leading spinning mills with an installed capacity of 132,180 spindles, which is further complemented by its strategically located manufacturing facilities in Karachi, Kotri, and Muzaffargarh, enhancing operational diversification and supply chain efficiency. Tata Textile has developed a well-established and diversified customer base, which supports business sustainability and reinforces its presence in both local and international markets. The Company is also recognized for producing high-quality specialized yarns, including siro, slub, weaving, and knitting yarns, catering to a broad spectrum of customer requirements and end-use applications.
During FY25, sales declined by ~10% to PKR 41.2bln (FY24: PKR 45.8bln). High-cost raw material inventory and elevated energy tariffs impacted operating efficiency and compressed margins, with gross margins declining to 5.6% (FY24: 7.3%; FY23: 12.2%) and operating margins to 2.7% (FY24: 4.9%; FY23: 9.2%). Net margins improved to 2.7% in FY25 (FY24: -1.2%; FY23: 0.7%), supplemented by income from short-term investments. On the financial risk side, the working capital days remained elevated due to extended inventory holding and receivable cycles. Working capital requirements are primarily financed through short-term borrowings. During 9MFY26, the topline stood at PKR 29.1bln with profitability indicators showing slight improvement, with gross profit margins standing at 6.2% and operating margins at 3.1%. The Net margin witnessed decline mainly due to unrealized losses on short term investments. The Company remained focused on reducing its debt profile through reduction in its short term obligations
Tata Textile continues to focus on operational efficiency and cost optimization through BMR initiatives. Recently, the Company has also added 30,000 spindles to enhance its production capacity and operational scale. Moreover, Tata Textile is gradually increasing its captive renewable energy capacity through solarization projects to mitigate energy-related cost pressures and improve operational sustainability. These initiatives are expected to support the Company’s competitiveness over the medium term. Going forward, through these initiatives, the Company’s profitability and gross margins are expected to improve.
The ratings depend on consistent improvement in the Company’s profitability. Prudent administration of the investment book continues to hold importance. The sustainable recovery of coverages and stable generation of cash flows from core consolidated operations remain critical for the assigned ratings.

About the Entity
Tata Textile Mills Limited (‘Tata Textile’ or ‘the Company’), incorporated in 1987 as a public company, is engaged in the manufacturing and sale of different varieties of yarn.
Major shareholding (~76.43%) of the Company resides with the Directors, their spouse, and minor children. The remaining shareholding resides with mutual funds (~5.19%), financial institutions (~6.23%), and the general public (~12.14%). The Board is chaired by Mr. Mazhar Valjee, while Mr. Shahid Anwar Tata is the CEO. They are assisted by an experienced team.