Press Release

VIS Reaffirms Entity Ratings of Nishat (Chunian) Limited

Karachi, July 30, 2025: VIS Credit Rating Company Limited (VIS) reaffirms entity ratings of Nishat (Chunian) Limited at ‘A-/A2’ (Single A minus/A two). Medium to long term rating of ‘A-’ indicates Good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of 'A2' indicates Good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings remain ‘Stable’. Previous rating action was announced on July 05, 2024.

Nishat (Chunian) Limited (‘NCL’ or ‘the Company’) is a major player in the country’s textile sector, involved in spinning, weaving, dyeing, printing, stitching, and processing of yarns, fabrics, and made-ups from raw cotton, synthetic fibers, and cloth. As of December 2024, the Company has undergone a change in its ownership wherein the holding of Nishat Mills Limited (NML) transferred to Mr. Shahzad Saleem. The registered office of the Company is situated at Gulberg II, Lahore, with manufacturing units in Kasur and Raiwind.

The assigned ratings incorporate the medium business risk profile of textile sector in Pakistan, shaped by economic cyclicality, intense competition and structural challenges. The sector is highly sensitive to domestic and international demand fluctuations, making it vulnerable to broader economic conditions.

Moreover, ratings take into account the financial risk profile of NCL driven by significant topline growth, recovery in margins and improvement in cash conversion cycle during the review period. However, elevated capitalization profile and weak coverages, remain major concern from the ratings perspective.

Going forward, the Company plans to mobilize a PKR 3 Bn LTFF. Despite the additional debt, capitalization and coverage metrics are expected to remain at same levels, underpinned by the anticipated gradual recovery in NCL’s profitability, driven by lower finance costs and the management’s continued focus on energy cost efficiencies.

For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.






Applicable Rating Criteria:

Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright July 30, 2025 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.