PACRA Maintains Entity Ratings of Allawasaya Textile and Finishing Mills Limited

The ratings reflect the presence of Allawasaya Textile and Finishing Mills Limited (“the Company” or “AWTX”) in Pakistan’s competitive textile industry. The Company is principally involved in the manufacturing and sale of yarn, with an operating capacity of 45,528 spindles. The product slate includes PC (Polyester Cotton) Yarn, PV (Polyester Viscose) Yarn and CVC (Chief Value of Cotton) Yarn with an average yarn count of 20s. The Company is strategically shifting its focus from CVC to PV to meet a wider demand in the market. During FY25, installed spindles declined, as the Company restructured operations by reducing two spinning lines and optimizing gaps through BMR.
During FY25, the Company’s profitability matrix and business fundamentals remained under stress due to muted local yarn demand. While net losses were incurred, the impact was partially offset by the utilization of prudent energy alternatives, supported by the installation of a 4.4MW solar plant with a further 0.6MW expected by the end of March 2026. The solarization project was funded through internal sources and strategic cost-minimization measures.
The Company displayed gradual improvement through the quarterly performance. A similar trend is observed in the Company’s gross profit margin, which stood at ~3.5% in FY25 (FY24: ~4.6%) and improved to 7.4% in 1QFY26. While there was a diminishing trend of net losses in the previous quarters, the Company made net profits during the first quarter of FY26. The liquidity somewhat strengthened with an improvement in the current ratio. The short-term leverage normalized to 9.9 (1QFY25: -11.1), and free cash flow from operations improved during the 1QFY26. The Company’s initiatives taken in prior quarters are reflected in a stable improvement in operational and financial performance.
The spinning industry is highly fragmented and consists of ~368 dedicated spinning units with total installed capacity of ~13.4 million spindles and ~198,800 rotors. However, operational capacity stood lower at roughly ~9.5 million spindles, reflecting average utilization levels of about 70–72% during the year. Yarn production showed moderate recovery, reaching approximately 2.65–2.7 million metric tons in FY25, compared to ~2.5 million metric tons in FY24.
The ratings are dependent upon the Company’s ability to stabilize its business fundamentals, the sustainability of its strategic initiatives, and prudent input costs. The generation of sufficient cash flows and coverages remains critical for the ratings. The adherence to the debt matrix at an adequate level is a prerequisite for an assigned rating.

About the Entity
Allawasaya Textile and Finishing Mills Limited (the Company), is a listed company engaged in the manufacturing and sale of different varieties of yarn. 98.5% of the Company’s shareholding is distributed among family members of Mian Jamil, Mian Idrees and Mian Tauqir Overall control vests in an eleven-member board of directors. The CEO – Mr. Alamgir Jamil carries extensive experience in the textile industry and is supported by an experienced management team.