PACRA Maintains Entity Ratings of Interwood Mobel (Private) Limited

Interwood Mobel (Private) Limited (“Interwood Mobel” or “the Company”) is a well-established company with decades of experience in the production and sale of a wide range of furniture and fixtures for homes and offices, including kitchens, doors, wardrobes, flooring, and bespoke furniture. The Company’s in-house R&D and design department is a key strength, supported by a modern production facility equipped with advanced European machinery, including robotic systems for coating and polishing. This integrated production setup, covering wood processing, metalwork, veneering, and upholstery, ensures consistent quality standards and drives operational efficiency across all processes, enabling the Company to meet both domestic and international quality expectations. The Company maintains a dealership network and operates four flagship outlets located in Lahore, Karachi, and Islamabad, designed to enhance its product offerings, improve customer reach, and strengthen brand visibility in key urban markets. Pakistan’s furniture industry comprises both organized players, serving premium and mid-market segments, and a large unorganized base catering to cost-sensitive customers. Demand is driven by residential, commercial, and institutional projects, while fragmented production and limited adoption of modern manufacturing techniques constrain supply and operational efficiency within the sector. The organized segment has recorded steady export growth, particularly in high-quality and customized furniture, highlighting opportunities for further international market expansion. Key challenges facing the industry include rising input costs, inconsistent quality standards, and competition from imported products. Nevertheless, increasing urbanization, growing disposable incomes, and a rising preference for branded offerings provide the sector with meaningful potential for growth, formalization, and enhanced competitiveness. Interwood Mobel’s ownership remains concentrated within the sponsoring family, and the board primarily consists of close family members, indicating a lack of independent oversight and identifying an area for potential improvement. The management team demonstrates operational competence, and sound internal control systems are implemented across the organization, supported by a comprehensive internal audit function. During FY25, the Company recorded a year-on-year revenue growth of ~9.7%, primarily due to price adjustments and supported by balanced contributions from retail (~52%) and corporate (~48%) segments. While margins experienced slight moderation due to higher utilities and marketing expenses, the Company’s financial risk profile remains adequate, characterized by reasonable coverage ratios, a stable working capital cycle, and satisfactory cash flows. Its capital structure continues to be leveraged, with borrowings primarily comprising short-term loans to support working capital requirements. A notable development during FY25 was the Company’s participation in a major international institutional furniture project in the Middle East, undertaken in collaboration with regional partners. This engagement further underscores the Company’s capability to execute large-scale, high-specification projects and enhances its credentials in export markets.
The ratings are dependent on the Company’s ability to sustain its industry-leading position while navigating a dynamic business environment. Sustained revenue growth, stable profit margins, and adherence to financial projections shall remain imperative. Meanwhile, strengthening the financial profile through effective working-capital management, adequate coverage ratios, and successful execution of strategic initiatives, will be crucial for long-term business and rating stability.

About the Entity
Interwood Mobel (Private) Limited, founded in 1974 by Mr. Farooq Ahmed Malik, has over 50 years of experience in furniture manufacturing and sales. The Farooq family holds ~99.9% of the shares, with Mr. Omar Farooq and Mr. Ali Farooq owning ~33% each, and the founders holding ~17% and ~16%. The company is led by CEO Mr. Omar Farooq, supported by a professional management team.