Press Release
VIS Reaffirms Entity Rating of Saya Weaving Mills (Pvt.) Limited
Karachi, June 12, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Saya Weaving Mills (Pvt.) Limited (‘SWML or the ‘Company’) to 'A-/A2' (‘A Minus/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 remained ‘Stable’. Previous Rating action was announced on April 17, 2024.
Saya Weaving Mills (Pvt.) Limited (“SWML” or “the Company”) is a privately held textile manufacturing firm engaged in producing and selling greige fabrics, finished fabrics, home textiles, and apparel. SWML operates two manufacturing units located in the Sindh Industrial Trading Estate (SITE), Karachi. These units consist of weaving and stitching facilities, enabling the Company to manage multiple stages of textile manufacturing in-house.
Pakistan’s textile sector faced challenges driven by economic cyclicality, intense competition, and structural constraints. Industry remains sensitive to demand fluctuations, exposing it to broader economic pressures. In 3QFY25, the sector demonstrated growth, primarily fueled by the value-added segment, despite challenges in domestic cotton production necessitating reliance on imported cotton. Exporter profitability remains vulnerable to cotton market volatility, inflationary pressures, and exchange rate fluctuations, while persistently high energy costs continue to strain overall cost structures. Furthermore, rising input costs and regulatory changes are creating a challenging environment for the sector.
Assigned ratings reflect Saya Weaving Mills’ revenue growth supported by stable financial performance. The Company operates across both domestic and international markets, offering a diversified product range focused on fabric and towel segments. Despite challenges, the Company has sustained top-line growth. While profitability indicators have faced pressure from rising raw material costs, increased energy tariffs, and higher manufacturing overheads, the Company continues to effectively manage operations and maintain its revenue momentum. Management expects profitability to improve going forward, supported by efficiencies arising from expansion of solar energy capacity and other sustainability initiatives.
The ratings also reflect the Company's overall financial risk profile, with borrowings maintained at manageable levels, resulting in a conservative gearing, however, leverage remains elevated. Debt service coverage remained adequate while FFO coverages witnessed a drop in line with the profitability. Going forward, ratings remain sensitive to improvement and sustainability in profitability indicators. Continued focus on operational efficiencies and cost control will be key in supporting the overall profitability profile.
For further information on this rating 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