
Press Release
VIS Maintains Entity Rating of Rajby Industries
Karachi, August 06, 2025: VIS Credit Rating Company Limited (VIS) maintains entity ratings of ‘A-/A2’ (Single A Minus/A Two) for Rajby Industries. Long-term entity 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 ‘A2’ indicates good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings is revised from ‘Positive’ to ‘Stable’. Previous rating action was announced on July 15, 2024.
Rajby Industries (‘RI’) is a partnership firm established in 1990, primarily engaged in the export-oriented manufacturing of Ready-to-Wear (RTW) apparel, with a specialization in denim garments. The Company’s product portfolio includes jeans, trousers, shorts, jeggings, pants, jackets and shirts. The Company’s manufacturing units and the registered office is located in the Korangi Industrial Area, Karachi. As part of its continued growth RI plans to transition to a private limited company during 2025.
Pakistan’s textile sector faces elevated business risk due to economic cyclicality, intense competition, and structural inefficiencies. The industry remains highly sensitive to global and domestic demand shifts. In FY24, cotton production rose 79% from a low FY23 base but declined 59.4% YoY by October 2024. A USDA-projected recovery to 5.55 million bales in FY25 hinges on overcoming declining cultivation, energy costs, and adverse weather. Despite domestic cotton shortfalls, 3QFY25 textile exports grew, driven by value-added products. However, profitability remains under pressure due to raw material volatility, inflation, currency fluctuations, high energy costs, and ongoing regulatory and input cost challenges.
The assigned rating reflects RI’s strong market position in the export-oriented RTW apparel sector, with a focus on denim garments. The Company’s consistent revenue growth, satisfactory cashflow generation and healthy debt service coverage supports its credit profile. However, high client concentration and exposure to cost pressures, particularly in material costs and regional competition pose challenges. While RI has demonstrated operational efficiencies and margin improvements, the persistence of these pressures in 10MFY25 has moderated financial performance.
For further information on this ratings announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria: Corporates:
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf