Press Release
VIS Maintains Entity Ratings of The Crescent Textile Mills Limited
Karachi, June 30, 2026: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of The Crescent Textile Mills Limited (‘CTM’ or ‘the Company’) at ‘A-/A2’ (Single A Minus/A Two). The 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. The short-term rating of ‘A2’ denotes good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned rating has been revised from ‘Negative’ to ‘Stable’. Previous rating action was announced on May 21, 2025.
The Crescent Textile Mills Limited was incorporated in 1950 and converted into a public listed company in 1958. The registered office and manufacturing facilities of the Company are located in Faisalabad. The assigned ratings incorporate CTM’s established presence, vertically integrated operations and pressure from a volatile environment in textile sector. The ratings draw support from the Company’s export-oriented operations, particularly in value-added home textile products catering mainly to European markets. The ratings further take into account the Company’s ongoing investment towards renewable energy capacity expansion, which is expected to partially mitigate elevated energy costs, going forward. The ratings also derive support from the Company’s portfolio of short-term investments and long-term quoted investments, which provide support to liquidity profile.
The ratings, however, remain constrained by the challenging operating environment of the textile sector, characterized by demand-side pressures, elevated operating costs, and competitive pressures. The strategic shift towards targeting medium-to-high-end customers through comparatively value-added products, resulted in improvement in product realizations and profitability indicators even though sales volumes remained under pressure during FY25 amidst slowdown in export order flows and delayed customer business execution. Financial risk profile also remained constrained by leveraged capitalization indicators, amid elevated reliance on short-term borrowings. Debt coverage indicators, though remained lower than the minimum threshold, depicted some improvement during FY25 and 9MFY26 supported by recovery in profitability and lower finance costs. Current ratio and coverage of short-term borrowings from stock-in-trade and trade debts remained weak.
Going forward, the ratings remain sensitive to the Company’s ability to sustain improvement in overall financial risk parameters amidst challenging operating environment and potential uptick in interest rates.
For further information on this ratings announcement, please contact at 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