Press Release
VIS Reaffirms Entity Rating of Feroze1888 Mills Limited
Karachi, August 05, 2026: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of by Feroze1888 Mills Limited (‘FML’ or the ‘Company’) at ‘AA-/A1’ (Double A minus/ A one). Medium to long term rating of 'AA-' indicates High credit quality; Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Short term rating of 'A1' indicates Strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on assigned ratings remains ‘Stable’. Previous Rating action was announced on May 19, 2025.
The assigned ratings are underpinned by Feroze1888 Mills Limited's ('FML' or 'the Company') established market position as one of Pakistan's leading vertically integrated value-added home textile exporters, supported by an operating history spanning over five decades, experienced management, longstanding relationships with globally recognized customers and a diversified manufacturing setup. The ratings also draw comfort from the Company's continued investment in operational efficiency and cost optimization through renewable energy projects and technological upgradation.
The ratings incorporate the challenging operating environment faced by the textile sector during FY25, characterized by subdued global demand, pricing pressures and elevated energy costs, which resulted in lower sales and compressed margins. However, sales demonstrated recovery during 9MFY26, while profitability also exhibited modest improvement, supported by higher sales, lower finance costs, management's cost control initiatives and continued efforts to diversify and expand the customer base.
The ratings also consider the Company's manageable capitalization profile, despite some increase in leverage owing to higher working capital requirements. Debt coverage indicators weakened during FY25 in line with lower cash flow generation; however, these metrics have shown improvement during 9MFY26, supported by recovery in operating performance and lower finance costs. A meaningful proportion of the Company's borrowings continues to comprise concessionary financing facilities, providing support to its funding profile.
Going forward, the ratings remain dependent on the Company's ability to sustain the recovery in operating performance, improve profitability and strengthen debt coverage metrics while maintaining capitalization indicators at manageable levels.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
VIS 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