Press Release
VIS Reaffirms Entity Ratings of International Textile Limited
Karachi, May 06, 2025: VIS Credit Rating Company Limited (VIS) reaffirms entity ratings of International Textile Limited at ‘A/A2’ (Single A /A Two). 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 'A2' indicates Good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings remain ‘Stable’. Previous rating action was announced on May 02, 2024.
International Textile Limited (‘ITL’ or ‘the Company’) is a vertically integrated textile composite involved in spinning, sizing, fabric and terry processing including dyeing and bleaching, fabric and terry weaving and complete cut to pack unit. ITL exports knitted and woven fabrics, towels, and other textile products internationally.
Pakistan’s textile sector continues to face economic, structural, and environmental challenges. While cotton production rebounded in FY24, a sharp YoY decline by October 2024 and uncertainties around FY25 targets persist due to limited cultivation, high energy costs, and climate risks. Despite growth in 3QFY25 exports—driven by value-added products and imported cotton—profitability remains under pressure from raw material price volatility, inflation, currency fluctuations, rising gas prices, and tax regime changes.
The assigned ratings reflect ITL’s steady revenue growth and adequate financial profile. The Company remains export-focused, with a diversified portfolio in terry and garments segments serving clients mainly in North America and Europe. Despite higher revenues, profitability is under pressure from rising input costs and lack of exchange rate gains. Management anticipates improved margins through cost-saving initiatives like solar and biogas energy and reduced finance costs. Moreover, the equity base has strengthened through profit retention, while debt levels remain range-bound, keeping capitalization and liquidity within acceptable limits.
Looking ahead, improvement in margins, maintenance of capitalization indicators, and effective execution of efficiency initiatives will remain important for the 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