The Pakistan Credit Rating Agency Limited
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Muhammad Fahad Iqbal

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PACRA Updates the Ratings of Maksons Textile (Pvt.) Limited

Rating Type Entity
(18-Mar-21 )
(18-Mar-20 )
Action Upgrade Maintain
Long Term BBB- BBB-
Short Term A2 A3
Outlook Stable Positive
Rating Watch - -

The ratings continue to reflect modest business profile of Maksons Textile (Private) Limited (the Company), depicted by its niche market operations and strong margins. The same is due to long standing presence in the industry which has helped in establishing strong trade relations with suppliers and customers. The ratings incorporate the Company's experienced management team along with effective control environment. Despite many economic challenges, the Company has managed to perform well and secured a topline of PKR 678mln in 1HFY21. The Company's financial risk profile has improved characterized by strong leveraging, coverages and working capital management. The leveraging decreased during 1HFY21 on account of lower short-term borrowings. The ratings account for financial strength of the Company's sponsors – ALTariq Group - having strong presence in engineering and trading segments. With planned BMR activities, the Company is expected to bring efficiencies and growth, going forward.
The ratings are dependent on improving margins, in turn, profitability and ensuing cash flows. Meanwhile, maintaining a moderately leveraged capital structure and adequate coverages is important. Any significant deterioration in profits and/or coverages will have a negative impact on ratings.

About the Entity
Maksons Textile (Private) Limited (Maksons) was incorporated in 2000. It is a modern weaving unit specializing in greige fabrics, processed fabrics and made-ups including home textile. Maksons has a state-of-the-art weaving unit with an installed capacity of 114 weaving looms including Airjet & Sulzer looms. Shareholding is held equally by four individuals. The Company belongs to Al-Tariq Group, specializing in engineering, having companies involved in construction, trading, textile and power generation.

About the Instrument
Maksons Textile’s Board comprises four members, all our sponsors. The position of the Chairman is held by Mr. Abdul Quddoos whereas Mr. Khalid Majeed is the CEO of the Company. The day-to-day operations are run by Director - Mr. Muhammad Khalid - whereas the CEO assumes more of a monitoring role and also looks after the financial and banking issues.

The primary function of PACRA is to evaluate the capacity and willingness of an entity to honor its obligations. Our ratings reflect an independent, professional and impartial assessment of the risks associated with a particular instrument or an entity. PACRA's comprehensive offerings include instrument and entity credit ratings, insurer financial strength ratings, fund ratings, asset manager ratings and real estate gradings. PACRA opinion is not a recommendation to purchase, sell or hold a security, in as much as it does not comment on the security's market price or suitability for a particular investor.