PACRA Maintains the ratings of MACPAC Films Limited.

The ratings reflect MACPAC Films Limited's ("MACPAC" or the "Company") stable market position, sound governance structure, and an experienced management team. MACPAC is predominantly engaged in the manufacturing of Biaxially Oriented Polypropylene (BOPP) and Cast Polypropylene (CPP) films, with production primarily tied to the demand for food products and other consumer goods. The raw material of the finished product 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. Pakistan’s paper and packaging industry has faced margin pressures due to rising energy costs and inflationary impact, which increased the cost of sales and impacted profit margins. Despite these challenges, demand for packaging from the FMCG and food sectors is expected to sustain moderate production growth, with the industry outlook remaining stable, supported by sustainability initiatives and recycling trends. Despite economic headwinds, MACPAC preserved its market share by prioritizing quality and customer retention, ensuring stability. To further strengthen its market positioning, MACPAC Films Limited has commissioned a new Thermal Lamination Film machine. The facility applies a thin protective plastic layer to printed materials, enhancing durability and visual quality by guarding against moisture, abrasion, and environmental wear. The facility became operational in April'25. The Company operates with an installed capacity of 15,000 MT in BOPP and 7,000 MT in CPP, maintaining a combined capacity of 22,000 MT in FY25. During the year, BOPP operated at a utilization level of 77%, while CPP achieved 80%, resulting in an overall utilization rate of 78%.
On the business profile side, during FY25, MACPAC Films Limited achieved a topline of PKR 5,994mln, marking an increase of about ~6.7% compared to PKR 5,619mln in FY24 due to an increase in prices. Whereas, it stood at PKR 1,372mln at the end of 3MFY26. Gross profit margins declined to 11.5% during FY25 (FY24: 16.5%) and 12.8% during 3MFY26. However, the profitability of the Company declined to PKR 85mln (FY24: PKR 258mln) during FY25 and loss of PKR 19mln during 3MFY26 primarily due to elevated energy cost and the inflationary impact, which eroded margins despite stable revenues. During the 3MFY26, maintenance activities were conducted to ensure efficiency and operational excellence. Although production levels were slightly lower during the maintenance period, the activities are expected to deliver significant benefits through enhanced operational efficiency and improved productivity in the coming quarters, thereby supporting sustained growth and profitability. Further, to mitigate profitability challenges, the Company is transitioning to alternate energy solutions. As of FY25, the Company’s leverage increased to 25% (FY24: 15.9%), driven by higher borrowings mainly incurred for the thermal lamination machine and the solar panels installation. The equity of the Company remained intact at PKR 2.2bln (FY24: PKR 2.2bln).
The ratings are dependent upon the Company’s ability to sustain its healthy business profile amidst strong competition, while, effective and prudent management of financial risk indicators remains important. Moreover, upholding of governance framework is vital.

About the Entity
MACPAC Films Limited, incorporated as a Public Limited Company in 1993, is listed on the Pakistan Stock Exchange. Ownership is primarily held by the Elahi family (~47.65%), with major stakes distributed as follows: Mr. Shariq Maqbool Elahi (~15.45%), Mr. Habib Maqbool Elahi (~15.45%), and Mr. Ehtesham Maqbool Elahi (~16.60%). The Munshi family owns 14.85%, while the remainder is held by financial institutions, and the general public, with a free float of approximately 33.4%.