Press Release
VIS Reaffirms Entity Ratings of Ashraf Sugar Mills Limited
Karachi, August 03, 2026: VIS Credit Rating Company Limited reaffirms entity ratings of Ashraf Sugar Mills Limited (‘ASML’ or ‘the Company’) at 'A-/A2' (Single 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 rating is ‘Stable’. Previous rating action was announced on May 12, 2025.
Ashraf Sugar Mills Limited (“ASML” or “the Company”) is a public limited (unlisted) company incorporated in Pakistan on September 9, 1978 under the repealed Companies Act, 1913 (now replaced by the Companies Act, 2017). Its registered office is located in, Lahore. The Company is engaged in the production and sale of crystalline sugar, molasses, and other by-products catering to both domestic and international markets. The manufacturing facilities are based in Ashrafabad, District Bahawalpur with a production capacity of 20,000 TCD.
The ratings reflects the ASML medium business risk profile, underpinned by the cyclical and seasonal nature of the sugar industry and low research and development to improve and stabilize crop productivity. This is compounded by regulatory controls on import / export of the commodity affecting supply / demand dynamics with resultant impact on market price. The fixation of sugarcane support price has been recently removed.
The Company has been able to sustain a profitable position in the industry with focus on corporate clients. Recently, the Company has raised long term borrowings for BMR purposes which has increased its leverage, however, is expected to improve margins with improved efficiency as well as increased production through de-bottlenecking the process. Liquidity indicators remained adequate, supported by an improvement in the current ratio and a shorter cash conversion cycle, while debt servicing capacity remained satisfactory despite moderating during the ongoing period. The Stable outlook reflects expectations that improving agricultural output, together with continued operational enhancements and normalization of seasonal leverage, will support stability in the Company's operating and financial profile going forward.
For further information on this rating announcement, please contact at 021-35311861-64 or email at info@vis.com.pk.
Applicable Rating Criteria:
Corporate Rating
https://docs.vis.com.pk/docs/CorporateMethodology.pdf
VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf