Press Release
VIS Maintains Entity Ratings of Two Star Industries (Pvt) Limited
Karachi, May 21, 2026: VIS Credit Rating Company Limited (‘VIS’) has maintained the entity ratings of Two Star Industries (Pvt) Limited (TSIPL’ or ‘the Company’) at 'BBB+/A2' (‘Triple B Plus/A Two’). Medium to long term rating of 'BBB+' indicates adequate credit quality; Protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur 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 rating has been revised from ‘Negative’ to ‘Stable’. Previous ratings action was announced on April 21, 2025.
TSIPL, incorporated in 2016, is co-owned by Umer Group of Companies and RYK Group. The principal business of the Company is to manufacture and sale of white refined sugar. The registered office of the Company is located in Lahore, Punjab, whereas the manufacturing facility is situated in District Toba Tek Singh.
The ratings assigned to TSIPL reflect its association with established sponsoring groups having longstanding presence in the sugar and allied sectors, along with adequate operational scale and integrated production infrastructure. The ratings also incorporate improvement in operational performance during the ongoing crushing season, supported by higher cane availability, improved recovery levels, and recovery in sugar production. Profitability indicators strengthened amid favorable sugar prices and reduction in finance costs, enabling the Company to return to profitability after losses in the preceding period. Liquidity indicators also showed improvement due to low short-term borrowings and better working capital management. The assigned ratings further derive comfort from continued sponsor support and management’s focus on operational efficiencies and agricultural development initiatives aimed at improving cane quality and yields over the medium term.
The ratings remain constrained by the inherently cyclical and regulated nature of the sugar industry, which exposes the Company to volatility in sugar prices, procurement dynamics, and policy measures relating to exports and pricing. The financial risk profile, while improving, remains weak due to accumulated losses, elevated leverage, and dependence on external funding. Debt servicing capacity and internal cash flow generation continue to remain under pressure despite recent improvement in earnings. Additionally, the business remains exposed to high working capital requirements and fluctuations in crop quality and recovery levels. Sustained improvement in profitability, coverage indicators, and capitalization metrics while maintaining operational efficiency will remain important for sustaining the assigned ratings.
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