PACRA Maintains Entity Ratings of Fazal Holdings (Pvt.) Limited

The ratings incorporate the established position of Fazal Holdings (Private) Limited (“Fazal Holdings” or “the Company”) as a diversified investment holding entity Associated with the Fazal Group, one of the leading textile conglomerates of South Punjab. The Company maintains a robust investment portfolio comprising both strategic holdings (~73%) and a trading portfolio (~27%) diversified across key sectors of the economy.
Fazal Holdings’ strategic investments are Primarily Concentrated in Fazal Cloth Mills Limited (“FCML”) a renowned name in the spinning sector of Pakistan. It operates with a vision to establish vertical integration by offering a broad range of premium quality products at competitive prices, both in the local and international markets. It specializes in producing greige fabric and a variety of yarns, including multi-count/multi-twist, double, zero-twist, organic, Supima, Lycra, Giza, and USA cotton yarns.
The Company’s short-term trading portfolio, valued at PKR 14.55bln, is well diversified across key sectors including banking, fertilizers, energy, and fast-moving consumer goods. The portfolio primarily comprises blue-chip equities and mutual funds, ensuring a balanced mix of growth and income-generating assets. Exposure to the fertilizer and energy sectors continues to provide stable returns, while selective investments in defensive and consumer-driven stocks add resilience. Overall, the portfolio remains highly liquid, actively managed, and strategically aligned with prevailing market conditions.
On a standalone basis, Fazal Holdings posted a profit after tax of PKR 12.06bln for FY25 (FY24: PKR 3.72bln), reflecting a substantial increase of ~224% YoY. The remarkable improvement is primarily attributed to a revaluation gain of PKR 5.8bln on investment property, coupled with significant capital gains and dividend income from its trading book. The Company’s short-term investment portfolio expanded by ~70%, aligning with positive market momentum and prudent reallocation toward high-quality, liquid blue-chip securities. The Company’s balance sheet strength is reinforced by a strong equity base of PKR 24.9bln with a low leveraged capital structure. Short-term borrowings stood at PKR 1.95bln, while long-term borrowings amounted to PKR 2.7bln, primarily obtained to fund new investments and enhance liquidity. Consequently, the interest coverage ratio improved notably, supported by sizable free cash flows and strong dividend income. The Company’s investment decisions are led by Mr. Rehman Naseem, supported by dedicated research and analysis resources within the Fazal Group and external brokerage houses. The sponsor profile remains strong, reflecting the Fazal Group’s longstanding track record and diversified business presence in the textile, energy and Fertilizer. Continued sponsor support serves as a key rating factor.
The ratings are dependent on the management's ability to execute its envisaged strategy of growth and expansion amidst the prevailing tough environment. Timely materialization of these initiatives into sustainable ventures is critical. Strong performance of subsidiaries, stable dividends, and effective management of financial profile and liquidity remains important.

About the Entity
Fazal Holdings (Pvt) Ltd is Private Limited Company acting as a holding company associated with Fazal Group. Fazal Group was incorporated in 1966 and is a renowned textile Group in Pakistan. Fazal Cloth Mills Ltd. – the flagship Company of the Group, was also incorporated in 1966. Fazal Holdings is owned by the members of the sponsoring family i.e., Fazal family. Majority of shares reside with Mr. Rehman Naseem (~47.25%). Mr. Aamir Naseem Sheikh’s family owns a stake of ~47.25%; through his sons, Mr. Yousaf Aamir and Mr. Abdullah Aamir, owning ~22% each, in the Company. While remaining shareholding resides with Mr. Sheikh Naseem (~2.5%) and Mrs. Nighat Naseem (~3%).