Press Release
VIS Reaffirms Entity Rating of Shahtaj Textile Limited
Karachi, November 19, 2025: VIS Credit Rating Company Limited (VIS) reaffirms the entity ratings of ‘A-/A2’ (Single A Minus/A Two) for Shahtaj Textile Limited. Long-term entity rating of ‘A-’ reflects 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 short-term liquidity factors. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on November 13, 2024.
Shahtaj Textile Limited (“STL” or “the Company”), was incorporated as a public limited company in January 1990 and commenced commercial production in January 1992. Listed on the Pakistan Stock Exchange, the Company operates with the sole purpose of manufacturing greige?fabric and its marketing for both domestic and export markets. STL’s production facilities near Lahore are equipped with modern high-speed Toyoda and Picanol air-jet looms of Japanese and Belgian origin. The corporate head office is located in Karachi, supported by liaison offices in Lahore.
The ratings of Shahtaj Textile Limited (“STL” or “the Company”) reflect its established operating history, strategic focus on value-added processing, and sufficient liquidity profile. The Company also benefits from the backing of the Shahnawaz Group. Stable relationships with key local customers, contributing around 43% of sales, have supported earnings stability despite lower sales volumes. The Company serves both domestic and export markets, with the domestic segment representing the majority of revenue. Exports account for approximately 15% of sales, primarily destined for Italy and Turkey.
Profitability improved during the review period, driven by cost efficiencies, controlled operating expenses, and lower finance costs following partial debt repayments along with lower applicable interest rates. The transition toward toll processing operations has strengthened margins and is expected to support sustainable earnings growth. Capitalization indicators improved owing to profit retention and reduced borrowings. Liquidity remains adequate, supported by steady operating cash flows, manageable working capital requirements, and satisfactory coverage of short-term obligations. Company’s ability to maintain recent improvements in sales, sustain profitability, and ensure adequate liquidity and capitalization are important for maintain the ratings going forward.
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