Press Release

VIS Reaffirms Entity Ratings of Bismillah Textiles (Private) Limited

Karachi, October 17, 2025: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Bismillah Textiles (Private) Limited (‘BTL’ 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' signifies a 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 October 28, 2024.

BTL, established in 1989 as a public limited company and later converted into a private limited company in 2023, is primarily engaged in exports of made-ups and home textiles mainly to European markets. The Company’s head office and manufacturing facilities are located in Faisalabad.

Assigned ratings reflect higher business risk encountered by textile exporters emanates from declining domestic cotton production, reliance on costly imports, and persistent high energy costs and new taxes, all having adverse impact on profit margins across the sector. Furthermore, damage to the cotton crops caused by floods in recent months could further raise supply chain and cost-side challenges for textile companies in Pakistan.

Despite these challenges, there was substantial increase in the Company’s net sales in FY25 amid shift in sales mix to high margin end products. However, gross margin contracted as the Company could not fully pass on rising fuel and power costs onto the pricing. During FY25, net profitability improved, also strengthening the debt coverage ratios. Moreover, efficient working capital management and enhanced liquidity position supported the Company’s conservative capital structure. The Company expects sustained financial improvement driven by increasing net sales, cost reductions through expanded solar energy integration, and favorable interest rate trends. Meeting these projected enhancements will be important for the assigned ratings.

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

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report. VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright October 17, 2025 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.