Masood Spinning Mills Receives Preliminary A- Rating from PACRA

Lahore: In a recent development, Masood Spinning Mills Limited (MSML) has been assigned a preliminary A- rating by The Pakistan Credit Rating Agency Limited (PACRA) for its debt instrument, which is valued at PKR 3.0 billion. The rating reflects the company’s position in Pakistan’s spinning industry, bolstered by its affiliation with the influential Mahmood Group.

The company, primarily engaged in the manufacturing and sale of yarn and socks, is strategizing for growth by diversifying its business ventures and enhancing governance practices. A significant step in this direction is the commercialization of a new socks unit, aimed at expanding product offerings in the international market.

Despite a decline in revenue to PKR 15.3 billion in the first half of fiscal year 2025 from PKR 18.6 billion in the same period of the previous year, the company remains optimistic. The decline was attributed to a strategic pivot toward meeting the rising demand for coarse yarn amidst falling international cotton prices.

The installation of an approximately 11-megawatt solar system has optimized the cost structure, contributing to a net profit of PKR 107.3 million, down from PKR 207.1 million in the previous year. This renewable energy initiative is expected to secure long-term profitability for the company.

MSML is also set to issue sukuk, aiming to diversify and fortify its working capital funding. The security structure of the instrument, backed by a Debt Payment Account mechanism, ensures comprehensive coverage of the issue amount before maturity, with a ranking charge over current assets.

With stable cash flow coverages and efficient working capital cycles, particularly in its socks division, the company is well-positioned for sustainable growth, according to management representations.