Press Release

VIS Reaffirms Entity Ratings of Al-Ghazi Tractors Limited

Karachi, October 17, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Al-Ghazi Tractors Limited (‘AGTL’ or ‘the Company’) at ‘A+/A1’ (Single A Plus/A One). 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 'A1' signifies strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned rating is ‘Stable’. Previous rating action was announced on October 3, 2024.

The assigned ratings incorporate strong sponsors’ profile of AGTL where majority shares are held by the two multinational conglomerates; Al Futtaim Industries Company LLC and CNH Industrial (CNHI). Ratings also take into account AGTL’s competitive position as one of the two major players in Pakistan’s tractor market. The Company is the sole manufacturer of “New Holland” tractors in Pakistan having technical collaboration with CNHI. The registered office is located in Karachi while the corporate office is in Lahore. The assembly plant, located at Dera Ghazi Khan, has production capacity of 30,000 units per annum on a single-shift basis.

Financial risk profile improved amid revenue growth from higher prices, higher profit margins due to lower costs, and strengthened debt-servicing coverage. The Company has preserved a conservative capital structure on the back off equity expansion and minimal dividend payout. However, financial metrics declined in HY25 due to industry slump, decreasing market share, and impact of delay in renewal of the Government of Punjab’s Green Tractor Scheme. To maintain its market competitiveness and reduce potential overheads, the Company launched a higher horsepower tractor in October 2024 and successfully completed the digital transformation of its core operations through the implementation of SAP S/4HANA. Assigned ratings are dependent and sensitive to achieving projected improvements in sales and financial metrics, going forward.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk

Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf

VIS Issue/Issuer Rating Scale:
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright October 17, 2025 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.