PACRA Maintains the Entity Ratings of Ahmed Fine Textile Mills Limited

Ahmed Fine Textile Mills Limited (“AFTML” or “the Company”) is a well-known player in the competitive textile landscape. The Company’s ratings are underpinned by the continuous expansion of its business operations across multiple promising segments. Improvement in core performance and a strong commitment to long-term sustainability bode well for the assigned ratings. The Company maintains a diversified product slate comprising multiple yarn categories (CVC, PC, synthetic, blended and melange yarns), greige fabric, terry towels, bathrobes and bath sheets. As part of a broader product diversification strategy, the Company has undertaken capital expenditure to establish a dyeing and printing unit with an overall capacity of approximately 5 tons per day. These projects were primarily financed through long-term conventional borrowings and are currently under the implementation phase, with commercial operations of these units expected to commence by the end of FY26.

During FY25, the Company achieved a topline of PKR 47.2bln (FY24: PKR 46.6bln). This primarily stemmed from a deliberate shift from finer to coarse yarn count. This move was aimed at capitalizing on the rising demand and favorable product pricing dynamics in the domestic market. In terms of revenue contribution, the weaving segment emerged as the largest contributor, followed by spinning and terry. Core profitability registered a slight improvement, attributable to the procurement of cotton at a favorable price. The Company benefits from a 12-megawatt operational solar plant as a cost-efficient energy alternative, optimizing the overall cost structure. Income from the investment portfolio and monetary easing were the key factors, supplementing the net profitability matrix of the Company. These gains, however, were partially offset by the recent transition in the taxation regime. Consequently, the PAT posted a notable improvement, reaching PKR 978mln compared to the net loss of PKR 188mln.

The Company continues to meet its working capital requirements through a mix of internal cash generation and short-term borrowings. The financial risk profile remained adequate, supported by improved leveraging. Prudent management of the debt profile at optimal levels led to a modest improvement in coverage metrics. Going forward, management expects healthy earnings from the commissioning of new units and plans to undertake a BMR at its spinning facility in Rahim Yar Khan.
The ratings are dependent on the Company’s ability to maintain its core business performance while expanding into new potential segments. Any deterioration in the financial risk profile will have an impact on the assigned ratings.

About the Entity
Ahmed Fine Textile Mills Limited (“AFTML” or “the Company”), incorporated in 1989, is engaged in the manufacturing and sale of different varieties of yarn, fabric and towels. The board of directors comprises seven members. Mr. Rehman Naseem, the CEO, carries with him over two decades of experience in the textile sector. He is supported by a team of highly qualified and seasoned professionals.