Press Release
VIS Maintains Entity Ratings of Akram Cotton Mills Limited
Karachi, January 29, 2026: VIS Credit Rating Company Limited (‘VIS’) has maintained the entity ratings of Akram Cotton Mills Limited (“ACML” or “the Company”) at ‘BBB/A2’ (Triple B/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 ratings has been revised from ‘Stable’ to ‘Negative’. Previous ratings action was announced on December 06, 2024.
ACML is engaged in the business of manufacturing and sale of yarn. It specializes in the production of 100% carded and combed cotton yarn, with a count range of 20/1 to 30/1, mainly for hosiery purposes. ACML has been providing yarn variants, under the brand name ‘Anmol’, ‘Super Anmol’ and ‘Mahnoor,’ mainly to local customers. The main raw material, cotton, is procured from the local market. ACML is a family-owned business with shareholding of the Company being held by Mr. Ali Pervaiz and his wife, who are actively involved in the business operations. Mr. Ali Pervaiz also serves as a Federal Minister of Energy (Petroleum division).
The assigned rating reflects ACML’s long operating history in the spinning sector and its experienced sponsor-led management along with heightened business and financial risk. The Company continues to operate in a highly competitive and cyclical industry that remains sensitive to energy costs, raw material availability, and policy distortions, which have constrained demand for locally produced yarn and imparted pressure on margins. During the review period, subdued profitability, weaker capacity utilization, and elevated competition adversely affected operating performance, while a sizable build-up in working capital requirements led to higher reliance on short-term borrowings and a deterioration in liquidity and capitalization metrics. Although finance costs moderated and management has demonstrated commitment through equity support and planned efficiency initiatives, overall cash flow generation remains strained, limiting debt servicing capacity in the near term. Going forward, the rating will depend on the Company’s capacity to restore sustainable profitability, strengthen operating margins, and effectively manage energy-related cost pressures. Continued financial support and demonstrated commitment from the sponsors provide some comfort.
For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk
Applicable Rating Criteria:
Corporate Ratings
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf