PACRA Assigns Initial Ratings to Beacon Impex (Pvt.) Limited - PPSTS - PKR 1.0bln - Jun 26

The ratings reflect Beacon Impex (Pvt.) Limited's ("the Company" or "Beacon Impex") entrenched position in the dedicated bodywear segment, supported by a decade of vertical integration and sustained capacity expansion. The Company operates as a fully integrated textile manufacturer with in-house facilities spanning spinning, knitting, elastic, dyeing and processing, cutting, and garment manufacturing, primarily focused on bodywear, notably boxers and briefs. A globally recognized client portfolio, led by Puma, Hugo Boss, Levi's, and Amazon, provides strong revenue visibility and supports long-term business sustainability. During 1HFY26, revenue stood at PKR 24.7bln (1HFY25: PKR 23.5bln), being predominantly export-led, with Europe constituting the primary market, followed by North America and Asia. The financial risk profile remains adequate. During 1HFY26, FCFO amounted to PKR 3.3bln, while EBITDA coverage remained comfortable at 3.6x (FY25: 4.4x). FCFO-based coverage also remained adequate at 1.9x, supported by continued cash generation and a relatively lower borrowing cost environment. Total borrowings increased to PKR 17.1bln (FY25: PKR 15.6bln) to support business expansion; however, gearing remained broadly stable at 46.8% (FY25: 46.1%), underpinned by a strengthening equity base. The Company continues to benefit from concessional financing under SBP's LTFF and ERF/EFS schemes, supporting its debt servicing capacity. Net working capital days increased to approximately 92 days during 1HFY26 (FY25: 63 days), primarily reflecting higher inventory and receivable levels associated with increased operating requirements. To support working capital needs arising from its export-oriented operations, the Company has issued a Rated, Secured, Privately Placed Short-Term Sukuk ("PPSTS") of PKR 1,000mln structured under Musharakah (Shirkat-ul-Aqd). The instrument is secured through a ranking charge over current assets and further strengthened by a DPA mechanism that ensures availability of the full issue amount prior to maturity. Principal is repayable in bullet at maturity, while profit is payable on a quarterly basis.
Maintenance of the instrument rating remains contingent upon Company's ability to sustain its business growth & preserve adequate cash flow generation to comfortably service its financial obligations. Continued maintenance of healthy coverage indicators, prudent working capital management, and disciplined leverage will remain important rating considerations. Any material deterioration in operating performance, weakening of FCFO generation, significant pressure on liquidity, or a sustained increase in leverage beyond current expectations may exert downward pressure on the assigned rating.

About the Entity
Beacon Impex (Private) Limited ("the Company" or "Beacon Impex") commenced operations in 2005. The majority shareholding lies with the Company's CEO, Mr. Muhammad Shakeel Faridi, the Director Mr. Mudassar Zafar, and other sponsors. The Board comprises two members, including the CEO, supported by a qualified management.

About the Instrument
Beacon Impex issued a Rated, PPSTS of PKR 1,000mln carrying a markup rate of 6M-KIBOR+100bps with a tenor of six months. The instrument is secured through a ranking charge over the Company’s current assets, along with a DPA maintained under the lien of the Investment Agent. Under the DPA mechanism, PKR 250mln will be deposited 15 days prior to maturity, another PKR 250mln will be deposited 5 days prior to maturity, and the remaining PKR 500mln will be deposited 2 days prior to the maturity date, ensuring availability of the full principal amount before the redemption. The Sukuk is issued in Jun’26, carrying quarterly profit payments in Sep'26 and Dec’26, and shall be redeemed through a single bullet repayment in Dec’26.