Nishat Mills Limited Receives Preliminary Debt Rating from PACRA

Lahore: The Pakistan Credit Rating Agency Limited (PACRA) has assigned a preliminary debt instrument rating to Nishat Mills Limited (NML) for its PKR 7 billion privately placed term sukuk (PPSTS). NML, a major player in Pakistan’s textile sector and the flagship company of the Nishat Group, is set to benefit from this rating as it continues its comprehensive textile operations.

As a fully integrated textile company, NML spans the entire textile value chain, offering products such as yarn, grey cloth, processed fabric, towels, bathrobes, made-ups, and garments. The company’s revenue is predominantly export-driven, with a stable client base across America, Africa, Asia, and Europe.

NML has reported a topline of PKR 178.1 billion in the current financial year, up from PKR 160.2 billion in the previous year. This growth is attributed to advanced production technologies and ongoing initiatives in balancing, modernization, and replacement (BMR).

The company has also seen a slight improvement in its gross profit margin, thanks to a better cost structure through renewable energy alternatives. Despite industry-specific challenges, NML’s net profitability was bolstered by strategic investments in capital markets and equity holdings, yielding a bottom line of PKR 6 billion.

NML’s financial risk profile is robust, supported by a leveraged capital structure and healthy liquidity, which is enhanced by significant equity instrument allocations. The company’s working capital requirements are managed through internally generated cash flows and short-term borrowings.

PACRA’s rating reflects the importance of NML maintaining its core margins and profitability, as well as a prudent leveraged capital structure and sound coverage indicators for future sustainability.