PACRA Maintains Entity Ratings of Glamour Textile Mills Limited

Glamour Textile Mills Limited’s ('Glamour' or 'the Company') rating is anchored by the established acumen of its sponsors in the leather garments and spinning segments. Operating primarily in the local market, the Company maintains an adequate operational scale with 42,384 spindles, a small fraction of the industry's total 13.4mln spindles. While the Pakistani yarn sector saw a ~7.6% production growth in FY25, recovering from a two-year slump, a modest trend is expected to continue into FY26. The industry still faces considerable challenges, evidenced by widespread negative net profit margins. A major constraint is the rising cost of raw materials, driven by an increasing reliance on more expensive imported cotton, which now accounts for ~35% of the supply and directly impacts profit margins. Although recent regulatory changes, such as the removal of the GST exemption for exporters, and reduced interest rates offer some sectoral relief, the sector's sustained recovery hinges on effectively managing high raw material costs and achieving higher yarn offtake to cover fixed expenses. Glamour's overall revenue, which declined by ~25% due to sluggish yarn demand, stems from a mix of trading imported fiber and manufacturing carded yarn (cotton and viscose blends) across coarse to super fine counts. This combination of lower sales volume, elevated raw material procurement, inflated interest rates, and a heightened tax burden has kept business margins severely squeezed. On the financial risk front, the capital structure gathers support from retained earnings and revaluation gains. Borrowings are adequatly aligned with the working capital requirements, and sponsors provide cash to cover bank margins, as per the management's representation. However, limited operational cash flows have stressed the Company's overall coverage metrics. Moving forward, focused efforts to curtail energy-related costs are vital, and integrating best practices through an improved governance framework and stringent internal control mechanisms is essential for the Company's long-term benefit.
The ratings hinge critically on the Company's ability to sustain robust operations and capacity utilization despite the prevailing market conditions. Maintaining a strict adherence to the debt matrix is imperative, along with keeping cash flows and coverage metrics at an adequate level. Furthermore, the impact of elevated energy tariffs on the Company’s margins and overall profitability requires close monitoring.

About the Entity
Glamour Textile Mills Limited ('Glamour' or 'the Company') was incorporated under the repealed Companies Ordinance 1984 (now the Companies Act, 2017) on Sept-91 as a listed concern. The Company was delisted in May-18. Ownership of the Company resides among Elahi family. Mr. Asad Elahi and Mr. Azhar Elahi, directly and through their families, holds an equal stake of ~29% in the Company. While, Mr. Ather Javed Elahi and family holds ~28% stake. The remaining stake resides with Mr. Mansoor Elahi and his family. The Board is family dominated, chaired by Mr. Asad Elahi. While, the Company is managed by Mr. Azhar Elahi as the CEO. They are assissted by an experienced management.