PACRA maintains the entity ratings of Nishat Packaging Limited.

The assigned ratings reflect Nishat Packaging Limited’s (“NPL” or the “Company”) strong sponsor profile, an experienced management team, satisfactory market position and adequate customer profile. The Company specializes in the conversion and manufacturing of paper and polypropylene (PP) bags for the cement industry, hence demand closely tied to cement dispatches. Pakistan’s cement industry is showing clear signs of recovery after a prolonged slowdown, supported by stabilization under the IMF program. Cement industry demand has strengthened, with overall dispatches rising notably in the first quarter of FY26. Domestic sales increased by 17% due to revived private construction activity, improved project execution, and gradually returning consumer confidence. Exports grew by 21%, driven by stronger sea-based shipments and higher dispatches to Afghanistan, though border tensions pose a risk. Looking ahead, FY26 volumes are expected to reach 51–52 million tons, indicating steady progress toward recovery which will also improve the profitability of cement packaging companies. The raw material of the paper and PP bags is majorly imported, hence exposed to exchange rate risk. To manage exchange rate risk, the Company has built sufficient inventory to meet customer demand efficiently and cost-effectively. As of FY25, Nishat Packaging Limited has maintained an aggregate annual production capacity of 250mln bags, including 160mln paper bags and 90mln PP bags. During FY25, paper bag production was recorded at 42mln bags, translating into a capacity utilization of 26%, whereas PP bag production reached 50mln bags, reflecting a utilization level of 56%. Accordingly, the overall plant utilization remained at 37%. During FY25, the revenue of the Company increased due to the production of PP bags and stood at ~PKR 3.3bln (FY24: ~PKR 2.5bln). The Company’s revenue mix remained predominantly driven by paper bag sales, which accounted for more than 70% of the total revenue, while the remaining contribution was generated from polypropylene (PP) bags. The Company reported a net profit of PKR 510mln during FY25 (FY24: PKR -285mln), primarily attributable to an increase in revenue and gains realized from the sale of fixed assets. Moving forward, the Company aims to expand PP bag production, which will optimize utilization and stabilize profitability. Nishat Packaging Limited, benefits from economies of scale, supporting its rating. The Company has a leveraged capital structure, with long-term debt linked to expansion activities and short-term debt rising for working capital management. However, most receivables are from related parties, mitigating credit risk.
The ratings would remain dependent upon the Company’s ability to sustain its healthy business profile amidst strong competition, herein, effective and prudent management of financial risk indicators remains important. Moreover, upholding of governance framework is vital.

About the Entity
Nishat Packaging Ltd was incorporated as a Public Limited Company in 2004. D.G. Khan Cement Company Ltd. (DGKCC) and Shuaiba entered into an agreement on 12th June 2004 for setting up a paper sack plant in Pakistan, but later in June 2008, Nishat acquired the stake from Shuaiba Paper. Now NPL is a backward integration of D.G. Khan Cement Company Ltd. DG Khan cement is the major shareholder with 55% holding, Nishat Mills Ltd holds 25% shares, while the remaining 20% shareholding lies with Mansha Family. Mr. Mian Raza Mansha is the CEO and Chairperson of the Company. He has more than 26 years diversified professional experience in various business sectors. He is associated by an able team.