H. Nizam Din & Sons (Pvt.) Limited

CREDIT RATING REPORT | May-25

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
13-May-25 A- A2 Stable Maintain -
13-May-24 A- A2 Stable Maintain -
13-May-23 A- A2 Stable Upgrade -
13-May-22 BBB+ A2 Stable Initial -
About the Entity

H. Nizam Din & Sons (Private) Limited, incorporated under the Companies Ordinance, 1984, operates manufacturing units in Karachi (S.I.T.E.) and Lahore (34 km Ferozepur Road). The Company is majority-owned by Mr. Naveed Ahmad (~73.05%), with the remaining shares equally held by Mr. Ali Ahmad, Mr. Usman Ahmad, and Mr. Saad Ahmad (~8.89% each). Mr. Ali Ahmad serves as CEO and brings extensive business experience to the role.

Rating Rationale

The assigned rating reflects H. Nizam Din & Sons (Private) Limited’s (Nizam or “the Company”) reputable standing, strong presence, and long-established business history. Based upon the knowledge legacy and skills inherited from canvas tents/shelter manufacturing and exports, the Company has transformed itself into a leading global supplier of humanitarian relief products. This transformation has been driven by the Company’s ability to adapt to evolving international standards, expand its product portfolio, and strengthen its global supply chain network, particularly in servicing humanitarian agencies and NGOs. Nizam operates through two business verticals, one specializing in the relief and camping segment, and the other in garment/apparel production. Both units are equipped with state-of-the-art plant and machinery and supported by fully integrated processes that enhance productivity by streamlining the operations. The Company’s revenue stream is well-diversified, underpinned by a broad product portfolio encompassing relief supplies, apparel, camping equipment, made-ups, and workwear. This strategic diversification reduces concentration risk and enhances Nizam’s resilience to industry-specific and macroeconomic fluctuations. Nizam is among the few local companies approved by the United Nations and global donor agencies to supply essential relief items such as tents and blankets. The increasing frequency of natural disasters—amplified by climate change, and ongoing regional conflicts has led to a sustained rise in global demand for disaster relief and emergency response solutions. On the other imposition of reciprocal tariffs by the United States presents a broader trade risk, however, the impact on Nizam’s exports remains modest, given its limited exposure to the U.S. market. As per the management’s the current evolving landscape can potentially create opportunities, and Nizam remains well-positioned to respond with agility and scale. During 6MFY25, the Company recorded a sales revenue of ~PKR 7.14bln (FY24: ~PKR 13.11bln), representing an annualized growth of around ~9.6%, primarily driven by price adjustments and slightly increased volumes. Profitability remained stable, with the gross and net margin sustained at ~17.9% and ~2% respectively (FY24: ~17.5 & ~2%). The board of the Company is family-oriented, where sponsors are close family members and thus indicates room for further improvement. The operations of the companies are governed by a qualified team of professionals, and a sound system of internal controls is implemented across the organization. The financial profile of the Company is considered good with modest coverage, cash flows, while working capital cycle is stretched. Capital structure is leveraged, and borrowings are mainly comprised of short-term borrowings for working capital management. Going forward, the Company aims to enhance operational and cost efficiencies while strategically expanding its non-relief product portfolio to strengthen its export footprint.

Key Rating Drivers

The ratings are dependent on sustainable growth in top-line and bottom-line with upheld margins, and market share, while retaining sufficient cash flows and coverages. However, adherence to maintaining its debt metrics at an adequate level is a prerequisite.

REPORT CONTENTS
  1. Rating Analysis
  2. Financial Summary
  3. Rating Scale
  4. Regulatory Disclosure

H. Nizam Din & Sons (Pvt.) Limited

rating analysis

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Profile
Legal Structure

H. Nizam Din & Sons (Private) Limited was incorporated as a private limited company under the Companies Ordinance, 1984, on March 31, 1975. The Company’s registered office and one manufacturing facility are located at D/64 S.I.T.E., Karachi, while the apparel unit operates at 34 km Ferozepur Road, Lahore. 


Background

H. Nizam Din & Sons (Private) Limited traces its origins back to 1869. The business was significantly expanded by Mr. Faiz Ahmad—father of Mr. Naveed Ahmad, who grew its operations in rental tents and event catering. In 1975, the enterprise was formalized as a private limited company under the sponsorship of family members. Today, the shareholding is held by Mr. Naveed Ahmad, his three sons, Mr. Ali Ahmad, Mr. Usman Ahmad, and Mr. Saad Ahmad. The Company is now under the stewardship of the fifth generation, reflecting a long-standing family legacy. 


Operations

The principal activities of the Company include the manufacturing and export of canvas and processed fabrics; cotton canvas and PVC tents; bags; and canvas, and garment-based made-ups, including workwear.


Ownership
Ownership Structure

The Company is majority-owned by Mr. Naveed Ahmad, who holds approximately 73.05% of the shares. The remaining ownership is evenly distributed among Mr. Ali Ahmad, Mr. Usman Ahmad, and Mr. Saad Ahmad, each holding around 9%. To ensure long-term continuity and governance stability, the Company has initiated a formal succession planning process. In addition, a family constitution is already in place, outlining succession protocols and other key governance matters.


Stability

The Company's operations are primarily overseen by Mr. Naveed Ahmad, who has been associated with the organization since 1976. He is a seasoned businessman with extensive experience and diversified expertise across various facets of the industry. Mr. Ali Ahmad serves as the Chief Executive Officer (CEO) and plays an active role in both tactical and strategic decision-making. Mr. Saad Ahmad is responsible for business development and leads the sales and marketing function, playing a key role in driving new business initiatives. 


Business Acumen

The business traces its origins back over a century, with Mr. Naveed Ahmad and his forebears possessing deep-rooted, hands-on experience in its operations. The ownership carries extensive expertise in the fabric industry and has positioned the Company among the leading manufacturers of relief products in Pakistan.


Financial Strength

The Company has a strong presence in the relief items segment and has strategically diversified its operations through its wholly-owned subsidiary, Nizam Energy, which specializes in solar power projects.


Governance
Board Structure

The Board of Directors consists of four members, all of whom are close family members, bringing a diverse range of professional experience to the Company. The board is currently chaired by Mr. Naveed Ahmad; however, it does not include any independent directors at this time.


Members’ Profile

Mr. Ali Ahmad serves as the Chief Executive Officer and brings over 20 years of business experience to the role. The remaining board members are also professionally qualified, each contributing substantial industry experience and a well-diversified skill set.


Board Effectiveness

During FY24, the Board convened on multiple occasions, with the majority of members consistently in attendance, demonstrating strong engagement and commitment. The Board comprises individuals with extensive experience who actively contribute to the Company’s strategic decision-making and overall progress. To further enhance governance, dedicated committees are in place, and a clear segregation of duties is effectively implemented, supporting transparency, accountability, and overall board effectiveness.


Financial Transparency

Baker Tilly Mehmood Idrees Qamar Chartered Accountants serve as the external auditors of the Company. For the financial year ended June 30, 2024, the auditors issued an unqualified opinion on the Company’s financial statements. The audit firm is QCR-rated and classified in the ‘A’ category by the State Bank of Pakistan (SBP).


Management
Organizational Structure

The Company has established a clear and organized management structure, with functional departments designed to support operational efficiency and accountability. The organizational framework includes key management roles such as the Chief Financial Officer (CFO); Chief Operating Officers (COOs) for the Karachi and Lahore units; as well as managers responsible for Processing, Exports, Commercial Operations, Procurement, Utilities and Maintenance, and Administration. This structure helps facilitate coordinated operations and effective management across various functions.


Management Team

The Company is supported by a team of seasoned professionals with diverse expertise. Mr. Sajid Mehmood, Chief Operating Officer of the Karachi unit, brings over 26 years of versatile industry experience. Mr. Tahir Mumtaz, Chief Operating Officer of the Lahore unit, has more than 29 years of experience. Mr. Rehan Umer Soomar Chief Financial Office (CFO), a Chartered Accountant, possesses over 23 years of professional experience. The remaining team members are experienced professionals operating under the guidance of their respective COOs, contributing effectively to the Company’s operations.


Effectiveness

The Company has established several key committees to streamline its operations, including the Audit Committee, HR Committee, and IT Committee, all of which consist of senior management. Additionally, the Company has formed the Capex Steering Committee to assess and ensure the efficient utilization of capital. This committee convenes monthly to review progress. Other departments, including Purchasing, Finance, and Credit, are responsible for managing and meeting their respective monthly targets.


MIS

The Company has implemented Oracle EBS (ERP) to generate reports and manage the flow of information. It is capable of generating customized MIS/dashboard reports for the board and top management. The management maintains strong controls through the ERP.


Control Environment

The management has a strong control environment within the Company supplemented by a robust quality control system for its manufacturing processes. Additionally, the Company also has an internal audit department reporting to the CEO and BOD; which produces quarterly reports to ensure compliance with company policies and provide assurance on data integrity.


Business Risk
Industry Dynamics

As of December 2024, demand for relief items in Pakistan is driven by natural disasters, regional conflicts, and health crises. Despite strong exports of tents, canvas, and tarpaulin—USD138mln in FY23, up 76% YoY— domestic cotton production fell 33.3% YoY to 5.45mln bales, pushing cotton imports to a projected USD1.9bln in FY25 from USD448mln in FY24. Relief item exports remained stable at ~28,654 MT in FY23. The sector, represented by PCTMEA, includes three UN-registered manufacturers: H. Nizam Din & Sons, Paramount Tarpaulin Industries, and Zahra Tents Industries. In response to recent floods, the government distributed 600,000 tents, 400,000 tarpaulins, and 3.5mln mosquito nets. 


Relative Position

H. Nizam Din & Sons (Pvt.) Ltd remains one of Pakistan’s top 3 manufacturers of relief items. Its key competitors include Paramount Tarpaulin Industries and Zahra Tents Industries (Pvt.) Ltd. In the garments segment, the competitive landscape is more fragmented, with numerous players operating at various scales.


Revenues

In 6MFY25, the Company recorded revenue of PKR7,183mln, up 9.6% as compared to FY24, signaling early recovery after a 25% decrease in FY24 to PKR13,111mln (FY23: PKR17,479mln). The FY24 downturn was due to the one-time order of PDMA for 300,000 tents in the emergency situation in FY23. Export revenue, while still dominant, stood at PKR7,145mln 6MFY25 (FY24: PKR13,111mln), and local sales normalized to PKR82mln (FY23: PKR6,494mln). It was utterly due to the one-time order of PDMA for 300,000 tents in the emergency situation in FY23. The product mix remained diverse, with exports primarily driving revenue across canvas, tents/PVC tents, bags, and denim garments. 


Margins

In 6MFY25, the Company’s gross margin improved to 17.9%, supported by the better product pricing and cost control. The operating margin saw a modest uptick to 7.8%, reflecting improved efficiency at the operating level. However, the net profit margin contracted to 1.8%, primarily due to elevated finance costs. 


Sustainability

H. Nizam Din & Sons maintains a long-term strategic focus, including planned capital expenditures aimed at improving manufacturing efficiency and enhancing e-commerce capabilities to capture emerging online demand. Management continues to provide realistic forecasts and is actively pursuing operational improvements to remain competitive and sustainable in a shifting market landscape.


Financial Risk
Working capital

In 6MFY25, the Company’s working capital cycle remained stretched. Inventory days edged up to 117 (FY24: 116; FY23: 69), reflecting demand fluctuations. Trade receivable days stood at 54 (FY24: 54; FY23: 26), while trade payable days decreased to 60 (FY24: 80; FY23: 55), indicating smooth payments to suppliers. Consequently, gross working capital days increased to 171 (FY24: 170; FY23: 95), and net working capital days increased to 111 (FY24: 90; FY23: 40), pointing to prolonged cash conversion cycle. 


Coverages

FCFO stood at ~PKR 528mln in 6MFY25 (~PKR 997mln in FY24; ~PKR 1.51bln in FY23). The interest coverage ratio declined to 2.4x (2.8x in FY24; 6.4x in FY23), while the debt coverage ratio decreased to 1.6x (1.9x in FY24; 3.6x in FY23), indicating a slight reduction in the company’s headroom to cover finance costs and debt obligations. 


Capitalization

Total borrowings rose temporarily to PKR7.16bln in 6MFY25, compared to PKR2.94bln in FY24 and PKR2.68bln in FY23. This increase was primarily driven by short-term borrowings undertaken at the year-end to invest in mutual funds. Later on, till the year end the borrowings normalized. Which raised the debt-tocapital ratio to 56.1% (FY24: 35.0%; FY23: 34.1%). Short-term debt accounted for 95.7% of total borrowings. 
 
 

May-25

www.pacra.com

H. Nizam Din & Sons (Pvt.) Limited

financial summary

(PKR mln)

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Dec-24
6M		 Jun-24
12M		 Jun-23
12M		 Jun-22
12M
A. BALANCE SHEET
1. Non-Current Assets 3,954 3,958 3,831 2,999
2. Investments 3,552 72 0 0
3. Related Party Exposure 323 307 122 131
4. Current Assets 8,740 8,797 8,638 6,095
a. Inventories 4,823 4,366 3,932 2,672
b. Trade Receivables 1,888 2,399 1,502 946
5. Total Assets 16,569 13,134 12,592 9,225
6. Current Liabilities 3,410 4,375 4,415 3,123
a. Trade Payables 1,912 2,634 3,088 2,149
7. Borrowings 7,162 2,944 2,675 2,361
8. Related Party Exposure 0 0 5 7
9. Non-Current Liabilities 394 341 319 132
10. Net Assets 5,603 5,474 5,178 3,602
11. Shareholders' Equity 5,603 5,474 5,178 3,602
B. INCOME STATEMENT
1. Sales 7,183 13,111 17,479 8,241
a. Cost of Good Sold (5,901) (10,821) (14,709) (6,884)
2. Gross Profit 1,282 2,290 2,770 1,357
a. Operating Expenses (719) (1,347) (1,185) (861)
3. Operating Profit 563 943 1,585 495
a. Non Operating Income or (Expense) 5 18 (8) 9
4. Profit or (Loss) before Interest and Tax 568 961 1,577 504
a. Total Finance Cost (358) (545) (418) (153)
b. Taxation (81) (131) (375) (83)
6. Net Income Or (Loss) 129 285 784 268
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 528 997 1,508 549
b. Net Cash from Operating Activities before Working Capital Changes 183 525 1,210 437
c. Changes in Working Capital (4,296) (395) (1,413) (740)
1. Net Cash provided by Operating Activities (4,113) 130 (203) (303)
2. Net Cash (Used in) or Available From Investing Activities (90) (519) (243) (336)
3. Net Cash (Used in) or Available From Financing Activities 4,218 264 349 855
4. Net Cash generated or (Used) during the period 15 (124) (96) 216
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) 9.6% -25.0% 112.1% 25.0%
b. Gross Profit Margin 17.9% 17.5% 15.8% 16.5%
c. Net Profit Margin 1.8% 2.2% 4.5% 3.3%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) -52.5% 4.6% 0.5% -2.3%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 4.7% 5.4% 17.9% 7.7%
2. Working Capital Management
a. Gross Working Capital (Average Days) 171 170 95 127
b. Net Working Capital (Average Days) 113 90 40 54
c. Current Ratio (Current Assets / Current Liabilities) 2.6 2.0 2.0 2.0
3. Coverages
a. EBITDA / Finance Cost 2.4 2.8 6.4 5.6
b. FCFO / Finance Cost+CMLTB+Excess STB 1.6 1.9 3.6 2.3
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 0.7 0.6 0.3 0.8
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 56.1% 35.0% 34.1% 39.6%
b. Interest or Markup Payable (Days) 68.5 92.0 85.2 108.5
c. Entity Average Borrowing Rate 13.3% 15.3% 11.0% 5.6%

May-25

www.pacra.com

H. Nizam Din & Sons (Pvt.) Limited

rating scale

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May-25

www.pacra.com

H. Nizam Din & Sons (Pvt.) Limited

regulatory disclosure

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  1. Rating Team Statements
    1. Rating is just an opinion about the creditworthiness of the entity and does not constitute a recommendation to buy, hold, or sell any security of the entity rated or to buy, hold, or sell the security rated, as the case may be. (Chapter III; 14-3-(x))
    2. Conflict of Interest
      1. The Rating Team or any of their family members have no interest in this rating (Chapter III; 12-2-(j))
      2. PACRA, the analysts involved in the rating process, and members of its rating committee and their family members do not have any conflict of interest relating to the rating done by them (Chapter III; 12-2-(e) & (k))
      3. The analyst is not a substantial shareholder of the customer being rated by PACRA [Annexure F; d-(ii)]
      4. Explanation: for the purpose of the above clause, the term "family members" shall include only those family members who are dependent on the analyst and members of the rating committee.
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  3. Conduct of Business
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May-25

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