H. Nizam Din & Sons (Pvt.) Limited

RATING REPORT | May-26

Logo
Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
13-May-26 A- A2 Stable Maintain YES
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 operates manufacturing facilities in Karachi and Lahore. The Company is majority-owned by Mr. Naveed Ahmad, with the balance held equally among three family members. Mr. Ali Ahmad serves as Chief Executive Officer.

Rating Rationale

The assigned rating reflects H. Nizam Din & Sons (Private) Limited's (Nizam or "the Company") reflects the Company's established market standing, credible business track record, and recognized presence within the global humanitarian supply chain. The Company has positioned itself as a reliable international supplier of relief products, supported by its ability to align with international procurement standards and maintain a resilient global supply chain serving humanitarian agencies and non-governmental organizations. The Company operates through two business verticals: relief and camping products, and garment and apparel manufacturing. Revenue is well-diversified across multiple product lines, which reduces sectoral concentration risk and provides resilience against industry-specific volatility. The Company is among a limited number of domestic manufacturers approved by the United Nations and global donor agencies to supply relief items. The rising frequency of natural disasters, partly attributable to climate-related factors, alongside ongoing regional conflicts, has sustained international demand for emergency relief solutions. Pakistan's exports of tents, canvas, and tarpaulins remain concentrated in the Middle East, where humanitarian needs are driven by conflict and expanding refugee populations, particularly from Yemen, Syria, and Palestine. During FY25, sales revenue reached PKR 15.4 billion compared to PKR 13.1 billion in FY24, reflecting growth of ~18.1%. However, growth momentum has moderated, and volumes are expected to normalize as regional conflict situations stabilize. Pressure from rising imported raw material prices carries the potential to compress margins, which warrants close monitoring and constitutes the basis for a rating watch. The financial profile is characterized by modest debt coverage metrics, moderate cash flow generation, and an extended working capital cycle. The capital structure remains leveraged, with borrowings predominantly comprising short-term facilities for working capital. The board is family-oriented, with scope for enhancing independence. Day-to-day operations are managed by a qualified professional team within a structured internal control framework.

Key Rating Drivers

The ratings are dependent on sustainable growth in volumes, top-line and bottom-line with upheld margins, while retaining sufficient cash flows, coverages and optimized working capital cycle. 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

Logo
Profile
Legal Structure

Incorporated as a private limited company under the Companies Ordinance, 1984. Registered office and primary manufacturing facility are located in Karachi, with the apparel unit in Lahore.


Background

H. Nizam Din & Sons (Private) Limited traces its origins back to 1869. The business has a long-standing legacy spanning multiple generations and was formally incorporated as a private limited company in 1975 under family sponsorship.


Operations

The Company is primarily engaged in the manufacturing and export of technical textiles across multiple product segments. Operations are highly export-oriented, with the majority of products shipped internationally and a limited share sold locally. The Company is recognized for its humanitarian contributions, supplying relief products to international agencies during emergencies, and building a diversified technical textile portfolio.


Ownership
Ownership Structure

Majority ownership rests with the principal sponsor, while the remaining shares are distributed evenly among family members. A formal succession planning process and a family constitution are in place to support long-term continuity and governance stability.


Stability

Operations are guided by the principal sponsor, supported by senior family members in executive roles, ensuring continuity in strategic and operational oversight.


Business Acumen

The sponsoring family carries extensive expertise in the Technical Textile products industry, positioning the Company among the leading domestic manufacturers in its segment.


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, drawn from the sponsoring family, bringing diverse professional experience. Enhancement of board independence remains an area for future development.


Members’ Profile

The Board of the Company is led by experienced leadership with deep roots in the Company’s long-standing legacy. It is chaired by Naveed Ahmad, who brings over four decades of experience and has remained closely associated with the board over the years. The Company’s strategic direction is further guided by its CEO, Ali Ahmad, who has more than 21 years of business experience. The Board is led by experienced leadership with deep roots in the Company's legacy. Members bring substantial cumulative experience across financial, operational, and strategic functions.


Board Effectiveness

During FY25, 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, 2025, 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.


Management Team

The Company is supported by seasoned professionals with extensive industry experience leading key operational functions.



Effectiveness

Key committees, including Audit, HR, IT, and Capex Steering, support governance and operational oversight. Functional departments operate against monthly targets.


MIS

The Company has implemented an enterprise resource planning system enabling customized reporting for the board and senior management, supporting strong information controls.


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

The global relief sector forms a critical part of the broader emergency and disaster response market, encompassing products such as protective gear, medical supplies, shelters, and early warning systems. Demand in this sector has been steadily increasing, driven by the rising frequency of natural disasters linked to climate change, as well as ongoing regional conflicts and geopolitial tension. In CY25, the United Nations and its partners requested over USD 47bln to support ~190mln people across around 72 countries, with particularly high needs in regions such as the Middle East and North Africa. There is also a growing shift toward locally led aid initiatives and increased use of cash-based assistance programs. In Pakistan, the relief manufacturing industry includes around 70 tent manufacturers and exporters; however, only a limited number specialize in disaster relief supplies. Among these, H. Nizam Din & Sons, Paramount Tarpaulin Industries, and Zahra Tents Industries are notable as key UN-registered suppliers. From a trade perspective, Pakistan’s exports of tents, canvas, and tarpaulin recorded a growth of ~9.3% in FY25, reaching ~ 39,231MT. The Sector’s cost structure is heavily influenced by raw materials, particularly PVC, which constitutes ~80.5% of total sales costs (FY25: ~80.5%). With currently volatile international crude oil prices, PVC costs, which is a major raw material, are expected to remain uncertain. Cotton, another key input, is projected at ~10.2mln bales for FY26, with a ~40.0% increase in production as of 6MFY26 despite flooding. Ongoing geo-political tensions imposes further burden on the demand side. Geopolitical tensions and ongoing conflicts, particularly in the Middle East, are constraining supply chains for relief suppliers despite strong demand conditions. As a key end-market, the region’s instability disrupts trade routes, delays shipments, and raises freight and insurance costs, making timely delivery more challenging, increasing lead times and operational uncertainty. As a result, suppliers face execution risks and margin pressures, as higher logistics costs and delays limit their ability to fully capitalize on elevated demand.




Relative Position

The Company is among the top domestic manufacturers of relief items and has strong expertise in Technical Textiles. The garments segment operates within a more fragmented competitive landscape.


Revenues

In 6MFY26, the Company reported revenue of ~PKR 7,826mln, reflecting growth of ~8.9% versus the same period last year. Revenue remains well-diversified across multiple product segments, with relief tents and garments as the leading contributors. Geographically, Europe and the Middle East remain the principal export markets. FY25 revenue stood at ~PKR 15,486mln, up ~18.1% year-on-year, though volumes have softened in the current period.


Margins

Margins remained largely stable in 6MFY26. Gross margin stood at ~17.6% (6MFY25: 17.9%). Operating margin moderated to ~6.6% from ~7.8% on higher operating expenses. A decline in finance costs supported a ~10.8% growth in net profit, recorded at ~PKR 143mln (6MFY25: ~PKR 129mln).


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 6MFY26, the Company’s working capital cycle remained stretched. Inventory days edged up to 128 (6MFY25: 117; FY25: 119, FY24 116), reflecting demand fluctuations. Trade receivable days stood at 53 (6MFY25: 54, FY25: 54, FY24: 54; FY23: 26), while trade payable days increased to 63 (6MFY25: 58; FY25: 64,FY24: 80), indicating smooth payments to suppliers.


Coverages

FCFO stood at ~PKR 251mln in 6MFY26 (6MFY25: PKR 528mln) (FY25: PKR 884mln, FY24: PKR997mln). The interest coverage ratio increased to 2.6x (6MFY25: 2.4x), while the debt coverage ratio decreased to 0.6x, indicating a reduction in the company’s headroom to cover debt obligations.


Capitalization

Total borrowings rose to PKR7.29bln in 6MFY26, compared PKR 7.1Mln 6MFY25 (FY25: PKR 4.1bln, FY24: PKR: 2.9bln). This increase was primarily driven by short-term borrowings undertaken at the year-end to invest in mutual funds. Short-term debt accounted for 94.7% of total borrowings.
 
 

May-26

www.pacra.com

H. Nizam Din & Sons (Pvt.) Limited


Financial Summary

Logo

(PKR mln)


 Dec-25
6M		 Jun-25
12M		 Jun-24
12M		 Jun-23
12M
A. BALANCE SHEET
1. Non-Current Assets 5,015 4,954 3,958 3,831
2. Investments 3,067 138 72 0
3. Current Assets 10,013 10,404 8,797 8,638
a. Inventories 5,213 5,734 4,366 3,932
b. Trade Receivables 2,312 2,212 2,399 1,502
4. Total Assets 18,406 15,802 13,134 12,592
5. Current Liabilities 4,010 4,540 4,375 4,415
6. Borrowings 7,293 4,183 2,944 2,675
7. Non-Current Liabilities 377 497 341 319
8. Shareholders' Equity 6,726 6,582 5,474 5,178
B. INCOME STATEMENT
1. Sales 7,826 15,486 13,111 17,479
2. Gross Profit 1,375 2,583 2,290 2,770
3. Operating Profit 519 973 943 1,585
a. Total Finance Cost (285) (629) (545) (418)
4. Net Income Or (Loss) 143 156 285 784
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 251 884 997 1,508
1. Net Cash provided by Operating Activities (2,910) (981) 130 (203)
2. Net Cash (Used in) or Available From Investing Activities (151) (268) (519) (243)
3. Net Cash (Used in) or Available From Financing Activities 3,110 1,265 264 349
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) 1.1% 18.1% -25.0% 112.1%
b. Gross Profit Margin 17.6% 16.7% 17.5% 15.8%
c. Net Profit Margin 1.8% 1.0% 2.2% 4.5%
d. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 4.3% 2.6% 5.4% 17.9%
2. Working Capital Management
a. Current Ratio (Current Assets / Current Liabilities) 2.5 2.3 2.0 2.0
3. Coverages
a. EBITDA / Finance Cost 2.6 2.6 2.8 6.4
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 52.0% 38.9% 35.0% 34.1%

May-26

www.pacra.com

H. Nizam Din & Sons (Pvt.) Limited


Rating Scale

Logo

May-26

www.pacra.com

H. Nizam Din & Sons (Pvt.) Limited


regulatory disclosure

Logo
  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.
  2. Restrictions
    1. No director, officer, or employee of PACRA communicates the information acquired by him for use for rating purposes to any other person, except where required under law to do so. (Chapter III; 10-(5))
    2. PACRA does not disclose or discuss with outside parties or make improper use of the non-public information which has come to its knowledge during a business relationship with the customer. (Chapter III; 10-7-(d))
    3. PACRA does not make proposals or recommendations regarding the activities of rated entities that could impact a credit rating of the entity subject to rating. (Chapter III; 10-7-(k))
  3. Conduct of Business
    1. PACRA fulfills its obligations in a fair, efficient, transparent, and ethical manner and renders high standards of services in performing its functions and obligations. (Chapter III; 11-A-(a))
    2. PACRA uses due care in the preparation of this Rating Report. Our information has been obtained from sources we consider to be reliable, but its accuracy or completeness is not guaranteed. PACRA does not, in every instance, independently verify or validate information received in the rating process or in preparing this Rating Report. (Clause 11-(A)(p))
    3. PACRA prohibits its employees and analysts from soliciting money, gifts, or favors from anyone with whom PACRA conducts business. (Chapter III; 11-A-(q))
    4. PACRA ensures before the commencement of the rating process that an analyst or employee has not had a recent employment or other significant business or personal relationship with the rated entity that may cause or may be perceived as causing a conflict of interest. (Chapter III; 11-A-(r))
    5. PACRA maintains the principle of integrity in seeking rating business. (Chapter III; 11-A-(u))
    6. PACRA promptly investigates in the event of misconduct or a breach of the policies, procedures, and controls, and takes appropriate steps to rectify any weaknesses to prevent any recurrence, along with suitable punitive action against the responsible employee(s). (Chapter III; 11-B-(m))
  4. Independence & Conflict of Interest
    1. PACRA receives compensation from the entity being rated or any third party for the rating services it offers. The receipt of this compensation has no influence on PACRA’s opinions or other analytical processes. In all instances, PACRA is committed to preserving the objectivity, integrity, and independence of its ratings. Our relationship is governed by two distinct mandates: i) rating mandate - signed with the entity being rated or issuer of the debt instrument, and ii) fee mandate - signed with the payer, which can be different from the entity.
    2. PACRA does not provide consultancy/advisory services or other services to any of its customers or their associated companies and associated undertakings that are being rated or have been rated by it during the preceding three years, unless it has an adequate mechanism in place ensuring that the provision of such services does not lead to a conflict of interest situation with its rating activities. (Chapter III; 12-2-(d))
    3. PACRA discloses that no shareholder directly or indirectly holding 10% or more of the share capital of PACRA also holds directly or indirectly 10% or more of the share capital of the entity which is subject to rating or the entity which issued the instrument subject to rating by PACRA. (Chapter III; 12-2-(f))
    4. PACRA ensures that the rating assigned to an entity or instrument is not affected by the existence of a business relationship between PACRA and the entity or any other party, or the non-existence of such a relationship. (Chapter III; 12-2-(i))
    5. PACRA ensures that the analysts or any of their family members shall not buy, sell, or engage in any transaction in any security which falls in the analyst’s area of primary analytical responsibility. This clause, however, does not apply to investments in securities through collective investment schemes. (Chapter III; 12-2-(l))
    6. PACRA has established policies and procedures governing investments and trading in securities by its employees and for monitoring the same to prevent insider trading, market manipulation, or any other market abuse. (Chapter III; 11-B-(g))
  5. Monitoring and Review
    1. PACRA monitors all the outstanding ratings continuously, and any potential change therein due to any event associated with the issuer, the security arrangement, the industry, etc., is disseminated to the market immediately and in an effective manner after appropriate consultation with the entity/issuer. (Chapter III; 17-(a))
    2. PACRA reviews all the outstanding ratings periodically on an annual basis. Provided that public dissemination of annual review and in an instance of change in rating will be made. (Chapter III; 17-(b))
    3. PACRA initiates an immediate review of the outstanding rating upon becoming aware of any information that may reasonably be expected to result in downgrading of the rating. (Chapter III; 17-(c))
    4. PACRA engages with the issuer and the debt securities trustee to remain updated on all information pertaining to the rating of the entity/instrument. (Chapter III; 17-(d))
  6. Probability of Default
    1. PACRA’s Rating Scale reflects the expectation of credit risk. The highest rating has the lowest relative likelihood of default (i.e., probability). PACRA’s transition studies capture the historical performance behavior of a specific rating notch. Transition behavior of the assigned rating can be obtained from PACRA’s Transition Study available at our website. (www.pacra.com) However, the actual transition of rating may not follow the pattern observed in the past. (Chapter III; 14-3(f)(vii))
  7. Proprietary Information
    1. All information contained herein is considered proprietary by PACRA. Hence, none of the information in this document can be copied or otherwise reproduced, stored, or disseminated in whole or in part in any form or by any means whatsoever by any person without PACRA’s prior written consent.

May-26

www.pacra.com