Press Release
VIS Reaffirms Entity Ratings of Indus Sugar Mills Limited
Karachi, December 26, 2025: VIS Credit Rating Company Limited (‘VIS’) has reaffirmed the entity ratings of Indus Sugar Mills Limited (‘ISML’ or ‘the Company’) at 'A-/A1' (‘Single A minus/A One’). 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 'A1' suggests strong likelihood of timely repayment of short-term obligations with excellent liquidity factors. Outlook on the assigned ratings is ‘Stable’. Previous ratings action was announced on October 16, 2024.
ISML, incorporated in 1980 as a public limited company (unquoted) in Pakistan, is engaged in the production and sale of refined sugar and allied by-products such as molasses and bagasse. Its manufacturing facilities are located at Kot Bahadur, Tehsil & District Rajanpur. ISML has steadily expanded its operations and maintains its own sugarcane cultivation that fulfills a small portion of its raw material needs.
The assigned ratings reflect the Company’s sustained operational performance, competitive industry standing, and prudent management practices, though partially constrained by weakening short-term liquidity indicators. ISML has demonstrated resilience amid industry-wide challenges including regulatory uncertainty, rising input costs, and raw material supply constraints. The Company continues to benefit from a sound governance framework, an experienced management team, and strong sponsor support. Profitability has improved due to firm selling prices and efficient cost controls, leading to enhanced cash generation and balance sheet strengthening. Despite a high working capital burden typical of the sugar industry, debt servicing capacity remains satisfactory, supported by improved earnings and manageable leverage. While the near-term liquidity position has moderated, the overall financial profile remains adequate. Going forward, while maintaining its financial parameters, the Company is required to improve its current ratio in order to alleviate pressure on its short-term rating.
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