Press Release
VIS Reaffirms Entity Ratings of MicroTech Industries Private Limited
Karachi, September 18, 2026: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of MicroTech Industries Private Limited at ‘A-/A2’ (Single A Minus/A Two). The medium-to long-term rating of ‘A-’ indicates good credit quality; protection factors are adequate. Risk factors may vary with changes in economic conditions. The short-term rating of ‘A2’ indicates a good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned rating remains ‘Stable’. Previous rating action was announced on August 21, 2025.
MicroTech Industries Private Limited (‘MTI’ or ‘the Company’) is one of the leading providers of electric meters to DISCOs backed by a strong order book that provides revenue visibility. The overall nature of the business remains highly cyclical, based on annual demand requirements of the DISCOs as well as what share of the demand the Company succeeds in procuring, as this is based on competitive tendering. MTI’s credit profile is protected by the terms of their contracts with the DISCOs under which supplies are primarily made against local letters of credits issued by banks on behalf of their customers, significantly mitigating receivable risk.
During FY24-FY26, market cyclicality resulted in continued revenue volatility while increase in input costs led to decrease in gross margins. Nevertheless, gearing has reached its lowest levels in past four years as the Company maintains a conservative approach to bank borrowings. Overall leverage, though still on higher side due to relatively high trade creditors, given the ratings, is also on an improving trend. The Company’s debt coverage and liquidity ratios remain strong.
To systematically address business concentration, MTI is executing a product diversification strategy at the group level by setting up dedicated manufacturing units focused on high-demand verticals, including transformers, cables, and conductors. To support operations of these companies, MTI has provided interest-free, on-demand advances, with management expecting these to be converted into equity in the respective companies going forward. No major fresh outflow is expected with regards to these advances/investments going forward. Looking ahead, ratings stability and financial profile strengthening will hinge on smooth, timely order execution, strict adherence to quality and regulatory standards, and continuous improvement in financial risk metrics as Pakistan’s power sector continues to evolve. VIS will also closely observe the impact of the group diversification strategy on the financial strength of MTI.
For further information on this ratings 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