Lahore: The Pakistan Credit Rating Agency Limited (PACRA) has assigned initial ratings to Masood Spinning Mills Limited, recognizing the company's substantial presence in the competitive textile industry. The ratings highlight the company's consistent operations and product diversification, particularly its recent expansion into the lucrative socks segment. This new venture aims to meet the rising demand for value-added products in international markets, offering a variety of socks, including fashion, medicated, sports, and formal wear.

According to PACRA, Masood Spinning Mills Limited reported a revenue increase to PKR 37.4 billion in FY26, up from PKR 31.2 billion in FY25, driven by a strategic focus on profitability and margin optimization. The company's investment in renewable energy infrastructure has enhanced operational efficiencies and reduced costs, leading to a significant rise in profit after tax, which reached PKR 765 million in FY26, from PKR 352 million in the previous fiscal year. Management anticipates continued positive growth, supported by ongoing operational efficiencies, renewable energy savings, and cost management strategies.

The company's financial risk profile has improved due to effective deleveraging and working capital management efforts. The deleveraging strategy involves selling non-current assets and monetizing group-owned properties to retire debt, which has improved coverage indicators. Ongoing asset monetization and debt reduction, along with prudent working capital management, are expected to further strengthen the financial risk profile in the medium term.

The ratings for Masood Spinning Mills Limited's financial instrument are bolstered by the security structure, primarily through the Sukuk Payment Account (SPA) mechanism. The SPA ensures funds are available before maturity through weekly contributions, backed by a ranking charge on current assets and a cross-corporate guarantee from Mahmood Textile Mills Limited.