Press Release
VIS Reaffirms Entity Ratings of Adam Sugar Mills Limited
Karachi, May 22, 2026: VIS Credit Rating Company Limited (‘VIS’) has reaffirmed the entity ratings of Adam Sugar Mills Limited (‘ASML’ or ‘the Company’) 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' suggests good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings is ‘Stable’. Previous ratings action was announced on May 07, 2025.
Adam Sugar Mills Limited was incorporated in Pakistan in October 1965 as a public limited company, initially under the name Bahawalnagar Sugar Mills Limited. Subsequently, in 1985, the Company was renamed Adam Sugar Mills Limited. The Company is principally engaged in the manufacturing and sale of sugar and related by-products and has an operational track record spanning approximately six decades. ASML commenced operations with an initial cane crushing capacity of 1,500 TCD, which has since been expanded to 16,000 TCD. The Company is primarily owned by the Adam family, with family members actively involved in strategic oversight and operational management. Headquartered in Karachi, the production facility is located in District Bahawalnagar, Punjab.
The assigned ratings reflect the Company’s established presence in the sugar sector and its consistent operational track record and gradual capacity expansion over time. During MY25, the Company recorded an improvement in revenues despite lower production, driven by stronger realized prices supported by export demand and favorable market conditions. Output remained influenced by cane availability and recovery trends, while the business continued to maintain a concentrated exposure to sugar with by-products providing supplementary income.
Profitability trends remained aligned with industry dynamics, with MY25 reflecting margin compression due to lower sucrose recovery and higher operating costs, followed by improvement in 1QMY26 supported by better pricing and recovery. Overall earnings remain closely linked to seasonal and agricultural cycles. The capital structure improved during MY25 on the back of lower short-term borrowings, with temporary fluctuations in 1QMY26 driven by seasonal working capital requirements. Liquidity is considered adequate, supported by available banking lines and ongoing access to external funding sources.
Going forward, the ratings remain sensitive to sugar market dynamics, along with the company’s ability to effectively manage overall financial risk.
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