Press Release
VIS Revises Short-term Entity Ratings of Akhtar Textile Industries (Private) Limited
Karachi, September 10, 2025: VIS Credit Rating Company Limited (VIS) has upgraded the entity ratings of Akhtar Textile Industries (Private) Limited (‘ATIL’ or ‘the Company’) from A/A2’ (‘Single A /A Two’) to A/A1’ (‘Single A /A One’). Medium to long-term rating of ‘A’ reflects good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short-term rating of ‘A1’ indicates 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 July 30, 2024.
ATIL is part of Akhtar Group of Companies, with diversified interests in textiles (primarily denim), dairy, and power, has an established operational track record of nearly four decades. The Company is engaged in the manufacturing and export of denim apparel principally pants, shorts, and skirts catering to international markets under long-standing export arrangements. Its head office and manufacturing facilities are located in Karachi.
Pakistan’s textile sector, contributing ~55% of exports and 8.5% of GDP in 9MFY25, remains vital despite facing challenges. Domestic cotton production declined sharply, increasing reliance on imports, which also currently offer cost and quality benefits. Exports rose 7.9% YoY to USD 17.9 billion, driven by value-added segments. New policies support local spinning but raise input costs of textile exports. External pressures, including US tariffs and rising local costs are squeezing margins. However, firms investing in renewable energy and benefitting from rupee depreciation may offset some of these challenges and maintain competitiveness.
The assigned ratings reflect Company’s continued revenue growth, supported by its established position in export-oriented denim garment manufacturing. The Company maintains a stable operational profile, with a product mix concentrated in denim pants and shorts and a geographical footprint primarily focused on the United States, which remains the largest export market.
While topline performance remained strong, profitability came under pressure from elevated input costs, including higher energy tariffs, raw material inflation, and rising wage expenses. A reduction in finance costs during 9MFY25 provided some relief. ATIL is focused on expanding its customer base while maintaining long-standing relationships with existing clients.
The ratings also incorporate ATIL’s financial risk profile. The capital structure remains moderately leveraged, supported by retained earnings, though overall leverage increased due to higher short-term borrowings and payables. Liquidity and debt service coverage remained adequate, with DSCR improving during 9MFY25. The Company’s financial flexibility is supported by ample liquidity in the form of loans and advances to related parties, which strengthen the Company’s overall liquidity position. Going forward, the ratings will remain sensitive to the Company’s ability to enhance profitability while effectively managing cost pressures.
For further information on this ratings announcement, please contact on 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