The Pakistan Credit Rating Agency Limited
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Sehar Fatima

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PACRA Maintains Entity Ratings of Maksons Textile (Pvt.) Limited

Rating Type Entity
(18-Mar-22 )
(18-Mar-21 )
Action Maintain Upgrade
Long Term BBB- BBB-
Short Term A2 A2
Outlook Stable Stable
Rating Watch - -

The assigned ratings incorporate Maksons Textile (Pvt.) Limited sound operating track record with a modest presence in the textile sector, depicted by its niche market operations and good margins. Same is due to long standing presence in the industry which has helped in establishing the strong trade relations with suppliers and customers. Maksons Textile (Pvt.) Limited is a venture of a group of four family members who are shareholders of Al-Tariq Group - specializing in engineering, presence in construction, trading, textile and power generation. Presence of senior management team that possesses considerable experience in the textile is positive. The Company’s sales mix remain titled towards exports where topline clocked at PKR 893mln in 2QFY22 (2QFY21: PKR 678mln). Despite of higher cost of sales and finance cost, increased in revenue resulted in higher profitability. The financial risk is revealing moderate leveraging, improved gross coverage and minor increased in working capital cycle. During the period July-December FY21-22, textile exports of the country surged 26 percent YoY, fielding $9.39 billion in total export remittances, as compared to $7.44 billion in the same period last year. This is attributable to increase in demand for textile products internationally and channeling of export orders towards Pakistani market. On a YoY basis, the exports of value-added textile items increased in both quantity and value in December 2021.
The ratings are dependent on Company’s ability to sustain its business profile while maintaining margins. Meanwhile, maintaining a moderately leveraged capital structure and adequate coverages is vital. 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.
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.