Press Release
VIS Reaffirms Entity Ratings of Novatex Limited
Karachi, May 19, 2026: VIS Credit Rating Company Limited (‘VIS’) has reaffirmed the entity ratings of Novatex Limited (‘Novatex’ or ‘the Company’) at AA/A1+ (Double A/A One Plus). Medium to long term rating of 'AA' indicates high credit quality; Protection factors are strong. Risk is modest but may vary slightly from time to time because of economic conditions. Short term rating of 'A1+' indicates strongest likelihood of timely repayment of short-term obligations with outstanding liquidity factors. Outlook on the assigned ratings is ‘Stable’. Previous ratings action was announced on March 20, 2025.
Novatex Limited is part of the Gani & Tayub (G&T) Group, which holds a majority stake in the Company and provides strategic and financial support. The Company operates as a diversified manufacturer within the PET value chain, with operations spanning PET resin, PET preforms, recycled PET (rPET), and biaxially oriented PET (BoPET) films. Its product portfolio includes both virgin and recycled polymer streams, reflecting a gradual shift toward sustainable packaging solutions and evolving end-user requirements.
The ratings reflect the Company’s established position in the PET and downstream packaging value chain, supported by an integrated operating model and diversified exposure to domestic and export markets across key end-use sectors. The capital structure remains moderately leveraged, primarily due to expansion-related borrowings and ongoing reliance on working capital financing, in line with the cyclical nature of operations. Debt servicing capacity remains dependent on profitability and cash flow generation and is sensitive to margin volatility and working capital requirements, while liquidity is supported by available banking lines. Profitability remains exposed to competitive pressures, demand conditions in domestic and export markets, fluctuations in energy costs, and broader external trade developments affecting export demand. The Company is also undertaking renewable energy initiatives, primarily through solar power installations and battery energy storage integration, aimed at improving energy efficiency and reducing reliance on conventional grid power.
Going forward, the ratings will remain sensitive to the Company’s ability to maintain stable profitability and cash flow generation amid input cost pressures and competitive market dynamics, while sustaining operational efficiency across key business segments.
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