PACRA Upgrades the Entity Ratings of Samad Rubber Works (Private) Limited

Samad Rubber Works (Pvt.) Limited (‘SRW’ or ‘the Company’) is primarily engaged in the manufacturing and marketing of apparel, outerwear, unicellular foams, and contact-based adhesives, in addition to supplying rubber/non-rubber and specialty fabric items to the Pakistan Armed Forces. With its longstanding history, SRW has solidified its position as an acclaimed player by establishing various Strategic Business Units (SBUs) across its diverse range of product offerings. In FY24, the Pakistan Bureau of Statistics (PBS) reported growth in Pakistan’s overall textile exports and value-added products. This growth was supported by reduced inflationary pressures, policy cuts, and stability in the PKR, which together fostered a positive investor sentiment and created a conducive environment for business. The rating upgrade reflects the group’s strong presence across all operational segments, diversified revenue streams, and growing export sales, which have collectively led to significant revenue and profitability growth. As a family-run business, a good governance structure and effective risk management further lend support to the ratings. In FY24, SRW achieved revenue of ~PKR 10bln, marking a cumulative growth of ~14.1%, driven by increased volumes in its core business segments. The primary growth driver was the apparel segment, followed by outerwear items, while the adhesive, foam, and defense segments made minimal contributions. Consequently, the gross and operating margins reflected the topline improvement. Going forward, the management is diligently working on enhancing revenues & margins by expanding existing operations, with particular emphasis on the apparel, adhesive, and foam segments. Additionally, the Company is undertaking rebranding initiatives, expanding its sales network, and increasing its customer base to further stimulate growth. Financial risk profile of the Company is considered good, characterized by an efficient working capital cycle, healthy coverages, and comfortable cash flows. SRW’s capital structure is moderately leveraged, mainly encompassing short-term borrowings (STBs). The Company is actively seeking new market opportunities to boost revenue streams while concurrently transitioning the business to the third generation of the sponsor family.
The ratings are contingent upon SRW maintaining its position within its respective business niches and achieving consistent growth in a dynamic market environment. Sustained revenue growth, robust profit margins, and prudent financial performance remain imperative. Looking ahead, continuous enhancements in the Company’s governance framework, business transition phase, and external audit function, particularly by engaging auditors from the SBP’s panel of category 'A', would be viewed positively.

About the Entity
Samad Rubber Works (Pvt.) Limited (formerly known as Pakistan Rubber Industries) is a private limited concern established in 1948. Mr. Abdus Samad (Late) laid the foundation by entering into the manufacturing of rubber hoses & setting up the latex foam unit. In 1962, following a split in the family business, the Samad Group evolved as a diversified business empire by serving diversified sectors. Presently, the entire ownership lies with the sponsoring family (two sons of Mr. Abdus Samad); Mr. Fazal Haq (Chairman) owns ~40% whilst Mr. Abdul Sami (CEO) maintains ~60% stake. Mr. Sami holds over three decades of experience and is actively involved in the business. He is being assisted by the Deputy CEO/CFO Mr. Arshian Mehboob and the members of the 3rd generation.