Press Release
VIS Upgrades Entity Ratings of Shahmurad Sugar Mills Limited
Karachi, 21th November 2025: VIS Credit Rating Company Limited (VIS) has upgraded the short-term ratings of Shahmurad Sugar Mills Limited (SSML) from ‘A2’ (A two) to ‘A1’ (A one), while maintaining the long-term entity rating at ‘A’ (Single A). 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. Shortterm rating of 'A1' indicates Strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the
assigned ratings is ‘Stable’. Previous Rating action was announced on August 26, 2024.
Listed on the Pakistan Stock Exchange, SSML is a public limited company primarily engaged in the manufacturing and sale of sugar. The Company also operates a distillery unit for the production and export of ethanol. SSML’s sugar manufacturing unit has a crushing capacity of approximately 12,000 tons per day (TPD), while its distillery operates with a capacity of 125,000 liters per day. The Company follows an integrated business model, with bagasse utilized for captive power generation to meet operational requirements.
The ratings reflect SSML’s established presence in the sugar industry, supported by its integrated distillery operations. Ethanol has emerged as a key contributor to revenues and profitability, providing diversification against the cyclicality of the sugar segment. Export realizations benefitted from favorable international pricing in MY24, supporting margins. However, ethanol production remains structurally dependent on molasses availability, which in turn is linked to sugarcane crushing volumes and recovery rates. The sugar business continues to face sector-wide risks including volatility in cane procurement, government intervention in ex-mill pricing, and inventory management.
The financial risk profile is supported by revenue growth and improved profitability during the ongoing year, largely driven by ethanol contributions alongside steady sugar operations. Cash flow generation has remained stable, enabling the Company to fund working capital and debt servicing requirements. Borrowing levels have been contained, with gearing and leverage indicators broadly unchanged, while liquidity remains adequate on the back of satisfactory coverage metrics and manageable seasonal funding needs.
The change in outlook to Stable takes into account SSML’s established business profile, diversification benefits from ethanol operations, and prudent financial management. Ratings remain sensitive to sector-wide risks, including volatility in cane procurement, molasses-linked ethanol supply constraints, and cyclical demand trends in both sugar and ethanol markets.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.
Methodology(s):
Applicable Criteria: Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
Applicable rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf