PACRA Maintains the Entity Ratings of E-Vision Manufacturing Limited

The ratings reflect E-Vision Manufacturing Limited's ("the Company" or "E-Vision") adequate business profile and its established position in the recycled polyester staple fiber (r-PSF) industry. The Company has carved a meaningful niche in the textile sector by producing various grades of white, black, and green r-PSF, as well as polyester chips, sourced from post-consumer polyethylene terephthalate (PET) bottles. The global market is undergoing a gradual shift from virgin to recycled polyester, driven by environmental advocacy from regulatory bodies worldwide. r-PSF offers tangible advantages over its virgin counterpart, including lower energy consumption during manufacturing, reduced dependence on natural resources, and a more competitive cost structure. The domestic textile sector experienced a structural shift in CY25, as a significant shortfall in cotton production compelled spinners to increase their use of man-made fibers (MMF) to sustain output levels. This substitution effect drove an 8.3% volumetric increase in PSF demand, with total supply reaching 657,075 tons per annum, up from 606,615 tons in CY24. Demand was met through a combination of domestic production and a sharp rise in imports. The sustained influx of competitively priced imports remains a key credit concern. Import volumes surged approximately 23.5% year-on-year in CY25 to 325,430 tons, capturing nearly 50% of the market. This persistent trend has structurally weakened the pricing power of domestic producers and contributed to suboptimal capacity utilization across the local industry. Against this backdrop, E-Vision recorded revenue of approximately PKR 1,117 million in CY25, a decline of around 22% from PKR 1,438 million in CY24, primarily due to lower sales volumes and sustained pricing pressure. To address this challenge, the Company undertook a sizeable capital expenditure to modify and upgrade its production plant, enhancing its ability to manufacture higher-quality r-PSF. This investment is expected to improve price realization and sales volumes in the domestic market and support an expansion of its export footprint in the Asia-Pacific region. Additionally, this investment is anticipated to rationalize the raw material mix, reduce input costs, and ultimately improve operating margins. The financial risk profile has faced some dilution, characterized by modest coverage ratios, constrained cash flows, and a stretched working capital cycle. The capital structure remains leveraged, with borrowings predominantly comprising short-term loans used for working capital management.
The ratings hinge on sustainable revenue growth and margin improvement. Moreover, it is essential to maintain a robust capital structure consistent with the financial projections. Looking ahead, improvements to the Company's governance framework, control environment, and external audit function by engaging auditors that are included in SBP’s panel of auditors would be viewed positively.

About the Entity
E-Vision Manufacturing Limited is a public; unlisted entity incorporated in 2013. The Company is engaged in the manufacturing and regeneration of polyester staple fiber with a gross production capacity of 60 tons per day. The Company’s shareholding is structured through Marylebone Management Limited (MML), an offshore investment company incorporated in the British Virgin Islands. MML is wholly owned by IDL Investments, which holds a 59.62% stake in E-Vision. The remaining 40.38% stake is held by Mr. Abdul Ghaffar, the Company’s Chief Executive Officer. IDL Investments itself is wholly owned by Mr. Kashif Naseem Afzal.