PACRA Maintains the Entity Ratings of Yunus Textile Mills Limited

Yunus Textile Mills Limited ("YTML" or "the Company") is recognized as a leading player in Pakistan’s textile industry. The assigned ratings are underpinned by the Company’s established business profile, resilient operational performance, and clearly articulated strategic vision. Despite a challenging operating landscape for the textile industry, YTML has continued to demonstrate commendable performance, reflecting its strong business fundamentals and competitive positioning.

YTML operates as a fully vertically integrated textile enterprise, encompassing all segments of the textile value chain. The Company is equipped with state-of-the-art production facilities and advanced manufacturing capabilities, enabling it to meet the stringent quality, compliance, and sustainability requirements of leading international customers. The governance framework remains sound, reinforced by the oversight of an experienced management team. This has enabled the Company to effectively manage operational complexities while maintaining its competitive edge in international market.

Over the years, the Company’s topline has exhibited considerable growth, primarily driven by an increase in business volumes and sustained demand. Revenue generation remains entirely export-oriented. YTML serves well-established and renowned brands in the international market. The Company continues to pursue a profit maximization-focused business strategy, emphasizing value creation over volume expansion alone. In pursuance of this strategy, management has undertaken various initiatives aimed at enhancing operational efficiency and optimizing the cost structure. Strategic investments in renewable energy projects, including solar and wind power generation facilities, have yielded meaningful cost savings while strengthening core profitability. This has translated into a robust margin profile, which remains comparatively stronger than that of industry peers. Additionally, significant non-core income from strategic and equity investments continues to supplement the bottom line. Limited reliance on external borrowings has kept finance costs at manageable levels, further supporting profitability. Although taxation continues to remain a key challenge, the Company has successfully achieved a notable improvement in its profitability matrix.

From a financial risk perspective, YTML maintains a strong liquidity profile, supported by substantial investments in capital and money market instruments. The debt portfolio primarily comprises subsidized financing facilities obtained under the SBP’s Export Refinance Facility (ERF) and Long-Term Financing Facility (LTFF) schemes. The Company predominantly finances its working capital requirements through internally generated cash flows. YTML maintains an efficient working capital cycle and a low-leveraged capital structure. Coverage indicators remain comfortably positioned. Looking ahead, management does not envisage any major expansion over the coming years.
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The ratings are dependent upon the intact business operations under the current economic conditions and draw comfort from the sponsor’s profile. Sustained margins, maintenance of coverages and cashflows at an optimal level while expanding business volumes remains critical.

About the Entity
Yunus Textile Mills Limited ("YTML" or "the Company"), a public unlisted Company incorporated in 2007, is a wholly owned subsidiary of YB Holdings (Private) Limited operating under the umbrella of the Yunus Brother Group. The Company is engaged in the manufacturing and export of knitted, weaved grey, fabrics and stitched made-ups. The Company's board comprises seven members, chaired by Mr. Muhammad Ali Tabba. The position of CEO rests with Mr. Muhammad Hassan Tabba.