Glamour Textile Mills Limited

CREDIT RATING REPORT | Nov-25

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Rating History
Dissemination Date Long-Term Rating Short-Term Rating Outlook Action Rating Watch
10-Nov-25 BBB- A2 Stable Maintain -
13-Nov-24 BBB- A2 Stable Maintain -
13-Nov-23 BBB- A2 Stable Maintain -
16-Nov-22 BBB- A2 Stable Initial -
About the Entity

Glamour Textile Mills Limited ('Glamour' or 'the Company') was incorporated under the repealed Companies Ordinance 1984 (now the Companies Act, 2017) on Sept-91 as a listed concern. The Company was delisted in May-18. Ownership of the Company resides among Elahi family. Mr. Asad Elahi and Mr. Azhar Elahi, directly and through their families, holds an equal stake of ~29% in the Company. While, Mr. Ather Javed Elahi and family holds ~28% stake. The remaining stake resides with Mr. Mansoor Elahi and his family. The Board is family dominated, chaired by Mr. Asad Elahi. While, the Company is managed by Mr. Azhar Elahi as the CEO. They are assissted by an experienced management.

Rating Rationale

Glamour Textile Mills Limited’s ('Glamour' or 'the Company') rating is anchored by the established acumen of its sponsors in the leather garments and spinning segments. Operating primarily in the local market, the Company maintains an adequate operational scale with 42,384 spindles, a small fraction of the industry's total 13.4mln spindles. While the Pakistani yarn sector saw a ~7.6% production growth in FY25, recovering from a two-year slump, a modest trend is expected to continue into FY26. The industry still faces considerable challenges, evidenced by widespread negative net profit margins. A major constraint is the rising cost of raw materials, driven by an increasing reliance on more expensive imported cotton, which now accounts for ~35% of the supply and directly impacts profit margins. Although recent regulatory changes, such as the removal of the GST exemption for exporters, and reduced interest rates offer some sectoral relief, the sector's sustained recovery hinges on effectively managing high raw material costs and achieving higher yarn offtake to cover fixed expenses. Glamour's overall revenue, which declined by ~25% due to sluggish yarn demand, stems from a mix of trading imported fiber and manufacturing carded yarn (cotton and viscose blends) across coarse to super fine counts. This combination of lower sales volume, elevated raw material procurement, inflated interest rates, and a heightened tax burden has kept business margins severely squeezed. On the financial risk front, the capital structure gathers support from retained earnings and revaluation gains. Borrowings are adequatly aligned with the working capital requirements, and sponsors provide cash to cover bank margins, as per the management's representation. However, limited operational cash flows have stressed the Company's overall coverage metrics. Moving forward, focused efforts to curtail energy-related costs are vital, and integrating best practices through an improved governance framework and stringent internal control mechanisms is essential for the Company's long-term benefit.

Key Rating Drivers

The ratings hinge critically on the Company's ability to sustain robust operations and capacity utilization despite the prevailing market conditions. Maintaining a strict adherence to the debt matrix is imperative, along with keeping cash flows and coverage metrics at an adequate level. Furthermore, the impact of elevated energy tariffs on the Company’s margins and overall profitability requires close monitoring.

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

Glamour Textile Mills Limited

rating analysis

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Profile
Legal Structure

Glamour Textile Mills Limited (‘Glamour’ or ‘the Company’) is a public limited company incorporated under the repealed Companies Ordinance, 1984 (now the Companies Act, 2017) on 14-Sept-91.


Background

In 1956, Elahi family entered in the business arena by setting up Pakistan Tannery, in Wazirabad, to manufacture and export leather jackets and other goods. Later, in 2004, Glamour - a listed concern and a spinning unit - was acquired. In 2005, Elahi family setup Glamour Graments, a demin manufacturing and export unit. In May-18, Glamour was delisted in accordance with the regulation no. 5.13 of PSX. Today, the Company manufacures coarse to super ne count of yarn, with an average count of 40s


Operations

The Company is primarily engaged in the manufacturing and sale of cotton yarn, along with trading raw materials (Viscose MMF). Currently, the Company operates a single spinning unit comprising 48,348 spindles. The Compnay has the total capacity of  9,547,929lbs and a utilization level of ~80 %. The production facility and head office is located in Manga Raiwind Road, Kasur.


Ownership
Ownership Structure

Ownership vests among Elahi family. Mr. Asad Elahi and Mr. Azhar Elahi, directly and through their families, holds an equal stake of ~56.5% in the Company. While, Mr. Ather Javed Elahi and family holds ~28% stake. The remainingstake resides with Mr. Mansoor Elahi and his family.


Stability

The ownership is considered to remain stable as major shareholding resides with Elahi family, with gradual induction of second generation in the business. However, no formal succession plan has been documented and/or agreed among the members of Elahi family.


Business Acumen

The sponsors holds stakes in textile segment through Glamour Textile and Glamour Graments, a demin manufacturing and exporting unit, along with interests in Pakistan Tanneries. Elahi family has been associated with textile value chain from a considerable span of time and have experienced numerous business cycles. They are well equiped with the relevant industry knowledge.


Financial Strength

Elahi family holds substantial financial footings to support the Company, if needs be, going forward.


Governance
Board Structure

Overall control of the Company vests with an three-member Board (BoD) that remains dominated by Elahi family. To enhance the decision making process, the BoD requires independence.


Members’ Profile

Mr. Asad Elahi chairs the BoD with an overall experience of over two decades. Other BoD members also carry signifcant experience in textile and allied chain


Board Effectiveness

The BoD meets on regular basis to discuss pertinent matters; while minutes of these meetings are recorded as per requirement. The BoD requires assisstance from formal BoD level committees


Financial Transparency

The Company has appointed PKF FRANTS & Co. as the external auditors. The rm is QCR rated and on SBP panel in category 'B'. The auditor has issued an unqualied opinon on the nancial statements for FY24. For FY25, the audit is in process. 


Management
Organizational Structure

The Company operates through five departments - Procurement, Administration and IT, Marketing and Technical. All departmental reports directly to the CEO, who in consent with the BoD makes pertinent decisions


Management Team

Mr. Azhar Elahi, the CEO, has been associated with the textile business since 2004 and holds an overall experience of more than two decades. Other members of the management are familir with the Company's startegy and are also equipped with the relevant industry knowledge. Mr Ishfaq Saeed, the CFO & Company secretary of the Company, hold 39 years of overall experience, and 20 year with the Company. 


Effectiveness

The Sponsor's remain closely involvement in day to day affairs of the Company to ensure effectiveness. However, there are no formal management level committees.


MIS

The Company has built an in-house information system to cater to its needs. The senior management monitors the overall performance through certain key MIS reports, generated as per requirement


Control Environment

The Company has built an in-house information system to cater to its needs. The senior management monitors the overall performance through certain key MIS reports, generated as per requirement


Business Risk
Industry Dynamics

Pakistan's yarn sector saw a ~7.6% production growth in FY25, recovering from a two-year slump, a modest trend is expected to continue into FY26. The industry still faces considerable challenges, evidenced by widespread negative net profit margins. A major constraint is the rising cost of raw materials, driven by an increasing reliance on more expensive imported cotton, which now accounts for ~35% of the supply and directly impacts profit margins. Although recent regulatory changes, such as the removal of the GST exemption for exporters, and reduced interest rates offer some sectoral relief, the sector's sustained recovery hinges on effectively managing high raw material costs and achieving higher yarn offtake to cover fixed expenses. Overall, the scetors outlook is on a watch.


Relative Position

The Company is a relatively small player with a market share of less than ~1% in terms of the installed capacity of 48,348 spindles.


Revenues

Glamour generates revenue from the sale of yarn and fibre trading in the local market only. During FY25, the Company reported a topline of ~PKR 4.5bln (FY24: ~PKR 6bln), posting a decline of ~25%, attributed to an increase in demand coupled with price change. Despite reduced finance costs, increased taxation has impacted the Company's bottomline. The Company strategically managing its market reach; however, going forward, the management requires a startegy revamp to post revenue growth.


Margins

During FY24, the gross margin of the Company witnessed an uptick (FY25:~4.7%, FY24: ~4.4%) due to lower volumes procured condidering hightened procurement cost. This had a trickled down effect on the operating margins of the Compay (FY25: ~3.9%, FY24: ~3.6%). On net level, reduced sales barely closed the bottom line positively (FY25: PKR 9mln, FY24: PKR 9mln), with an net profit margin of ~0.2%. Going forward, the Company’s overall margins may remain susceptible to the procurement startegy.


Sustainability

The Company's intention to improve financial performance through reduced energy costs - increase reliance on renewable energy source - remains imperative to ratings.


Financial Risk
Working capital

As of FY25, the Company's net working capital days inclined to 66 days (FY24: 44 days), attributable to higher inventory held days (FY25: ~46 days, FY24: ~29 days) due to reduced inventory turnover. Increased reliance on credit sales led to higher receivable days of ~24 days as of FY25 (FY24: ~18 days). On the payable side, the Company manages to procure raw materials on cash leading to minimal trade paybale days of ~5 days as of FY25 (FY24: ~3 days). The Company maintains a sufficient buffer to support the borrowing.


Coverages

Interest cover is a function of free cash flows and finance cost. As of FY25, the Company reported an FCFO of ~PKR 250mln (FY24: ~257mln) attributed to profits. Finance costs was low due to reduced interest rates; however, the interest cover improved and stood at 2.3x as of FY25 (FY24: 2.1x), reflecting the Company's adequate capacity to fulfill its short-term obligations. Going forward, the management requires to further boost its cash flows to manage the overall operations.


Capitalization

As of FY25, the Company's debt-to-equity ratio stood at ~41% (FY24: ~44%). Total borrowings followed the same trajectory and stood at ~PKR 1.27bln for FY25 (FY23: ~PKR 1.3bln) due to reduced reliance short-term borrowings (STBs) from financial institutions (FY25: ~PKR 568mln, FY24: ~PKR 652mln) and increased related party exposure (FY25: ~PKR 677mln, FY24: ~PKR 598mln). Total equity improved to ~PKR 1.9bln (FY24: ~PKR 1.6Bln), attributable to higher profit retention (FY25: ~PKR 662mln, FY24: ~PKR 635mln). The Company must sustain is capital structure, going forward.
 
 

Nov-25

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Glamour Textile Mills Limited

financial summary

(PKR mln)

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Jun-25
12M		 Jun-24
12M		 Jun-23
12M
A. BALANCE SHEET
1. Non-Current Assets 2,041 1,869 1,949
2. Investments 0 0 0
3. Related Party Exposure 0 0 0
4. Current Assets 1,467 1,474 1,108
a. Inventories 541 610 357
b. Trade Receivables 313 286 304
5. Total Assets 3,508 3,342 3,058
6. Current Liabilities 257 289 283
a. Trade Payables 60 54 37
7. Borrowings 594 707 474
8. Related Party Exposure 677 598 578
9. Non-Current Liabilities 127 110 94
10. Net Assets 1,852 1,638 1,629
11. Shareholders' Equity 1,852 1,638 1,629
B. INCOME STATEMENT
1. Sales 4,551 6,067 3,914
a. Cost of Good Sold (4,345) (5,783) (3,729)
2. Gross Profit 205 284 186
a. Operating Expenses (41) (47) (41)
3. Operating Profit 165 238 145
a. Non Operating Income or (Expense) 0 (8) (5)
4. Profit or (Loss) before Interest and Tax 165 230 140
a. Total Finance Cost (107) (129) (119)
b. Taxation (49) (91) (39)
6. Net Income Or (Loss) 9 9 (18)
C. CASH FLOW STATEMENT
a. Free Cash Flows from Operations (FCFO) 250 257 188
b. Net Cash from Operating Activities before Working Capital Changes 143 127 79
c. Changes in Working Capital (57) (329) 351
1. Net Cash provided by Operating Activities 86 (201) 430
2. Net Cash (Used in) or Available From Investing Activities 0 (36) (163)
3. Net Cash (Used in) or Available From Financing Activities 0 254 (277)
4. Net Cash generated or (Used) during the period 86 17 (9)
D. RATIO ANALYSIS
1. Performance
a. Sales Growth (for the period) -25.0% 55.0% -22.0%
b. Gross Profit Margin 4.5% 4.7% 4.7%
c. Net Profit Margin 0.2% 0.2% -0.5%
d. Cash Conversion Efficiency (FCFO adjusted for Working Capital/Sales) 4.2% -1.2% 13.8%
e. Return on Equity [ Net Profit Margin * Asset Turnover * (Total Assets/Shareholders' Equity )] 0.5% 0.6% -1.1%
2. Working Capital Management
a. Gross Working Capital (Average Days) 70 47 79
b. Net Working Capital (Average Days) 66 44 75
c. Current Ratio (Current Assets / Current Liabilities) 5.7 5.1 3.9
3. Coverages
a. EBITDA / Finance Cost 2.8 2.9 2.4
b. FCFO / Finance Cost+CMLTB+Excess STB 2.3 1.7 1.3
c. Debt Payback (Total Borrowings+Excess STB) / (FCFO-Finance Cost) 4.9 4.9 8.6
4. Capital Structure
a. Total Borrowings / (Total Borrowings+Shareholders' Equity) 40.7% 44.3% 39.2%
b. Interest or Markup Payable (Days) 38.0 55.5 66.6
c. Entity Average Borrowing Rate 8.7% 9.2% 8.3%

Nov-25

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Glamour Textile Mills Limited

rating scale

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Nov-25

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Glamour Textile Mills 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.
  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))
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  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))
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    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))
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  6. Probability of Default
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Nov-25

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