PACRA Maintains the Entity Ratings of Nisar Spinning Mills (Pvt.) Limited

The ratings of Nisar Spinning Mills (Pvt.) Limited ("NSMPL" or "the Company") is underpinned by the Nisar family's prominent business profile, with an established presence across diverse sectors of the economy, including chemicals, plastics, metals, spinning, and synthetic leather. The Company operates two spinning units with an installed capacity of 52,800 spindles and also engages in the production and trade of non-woven fabric, with two plants. NSMPL produces a variety of yarns, with Siro yarn being its prime selling product, followed by PVC yarn and CVC yarn, with exports accounting for 21.1% of the total revenue base. The textile industry showed signs of recovery, with exports reaching USD 16.7bln during 11MFY26, a ~1.0% increase over the previous year. However, the sector continues to face structural headwinds, including the transition from the final to the normal tax regime and a super tax. The removal of the GST exemption on textile inputs under the Export Facilitation Scheme (EFS) is expected to level the playing field between imported and domestically produced cotton. Climate-related risks, including regional flooding and shifting crop patterns, add further uncertainty to the domestic cotton crop outlook. Against this backdrop, NSMPL's own performance reflects both the pressures and the emerging tailwinds facing the sector. During 9MFY26, the Company's topline was recorded at PKR 10,615mln (9MFY25: PKR 10,354mln), broadly stable on a nine-month basis despite domestic yarn demand remaining subdued amid continued import-driven pricing pressures. Notably, more stable energy costs from the phased installation of an 8.5MW solar power plant helped gross margins recover to 6.6% in 9MFY26 (9MFY25: 3.2%). This improvement, together with the recent reduction in the policy rate, supported a turnaround to a net profit of PKR 78mln, compared to a net loss of PKR 337mln in 9MFY25. The financial risk profile of the Company remains adequate, with a stretched but broadly stable working capital cycle, with net working capital at 171 days in 9MFY26 (9MFY25: 168 days). The capital structure remained leveraged, with the debt-to-capital ratio of 73.8%, while shareholders' equity stood at PKR 1,462mln (9MFY25: PKR 1,499mln). Coverage metrics augmented, with interest coverage rising to 2.5x during the nine-months (9MFY25: 1x). The Company's medium-term strategy remains focused on expanding its footprint in the weaving and knitting segments, aimed at strengthening its business sustainability profile and enhancing value chain integration in response to the industry's evolving demand and consumption trends.
The ratings are dependent on management's ability to sustain the recent improvement in revenues, margins and profitability amid an evolving industry landscape. Prudent management of the working capital cycle while maintaining sufficient cash flows and coverages, remains imperative.

About the Entity
Nisar Spinning Mills (Pvt.) Limited ("NSMPL" or "the Company") was incorporated in 2005, under the Companies Ordinance, 1984 as a private limited company. NSMPL is exclusively owned by the sponsoring family, where the ownership of the Company resides with Mr. Anjum Nisar (81.89%) and Mr. Tariq Nisar (18.10%). The board also consists of two members: Mr. Anjum Nisar (CEO & Group Chairman) and Mr. Tariq Nisar (Executive Director). They are supported by well-qualified management.