Press Release
VIS Assigns Initial Entity Ratings of H.M. Esmail & Company Limited
Karachi, August 19, 2026: VIS Credit Rating Company Limited (VIS) has assigned an initial entity rating of H.M. Esmail & Company Limited (‘HMECL’ or ‘the Company’) at ‘BBB+/A2’ (Triple B Plus/Single A two). Medium to long term rating of ‘BBB+’ indicates adequate credit quality; Protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur 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’.
H.M. Esmail & Company Limited (‘HMECL’ or ‘the Company’) was incorporated as a private limited company on May 06, 1984. The principal business activities of the Company are manufacturing of electric cables, rods and other allied items and its trading. The Company’s production facility is located at SITE, Kotri, Karachi and the head office is located at Madina City Mall, Saddar, Karachi.
The assigned ratings incorporate the Company's established operating track record of over seven decades in Pakistan's wires and cables industry, diversified product portfolio, and sponsorship of the diversified ARY Group. The business profile is further supported by established relationships with corporate & commercial customers. The wires and cables industry exhibits a medium-to-high business risk profile, with demand remaining closely linked to construction activity, infrastructure development, industrial expansion and investments in the power sector. Following a challenging operating environment during FY25, characterized by subdued construction activity and weak private sector investment, the industry outlook has improved amid easing inflation, lower interest rates and the anticipated recovery in construction and infrastructure spending.
The Company's revenue declined during FY25 due to lower demand and the absence of sales to a key customer; however, profitability indicators remained resilient, supported by improved gross and operating margins. During 9MFY26, business volumes exhibited signs of recovery in line with improving macroeconomic conditions. Financial risk profile is considered satisfactory, underpinned by conservative capitalization, adequate liquidity, and satisfactory debt servicing indicators despite an increase in short-term borrowings to support working capital requirements. Going forward, the ratings will remain sensitive to the Company's ability to sustain the recovery in business volumes, diversify its customer base, and maintain its capitalization, liquidity and debt coverage indicators at levels commensurate with 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://vis.com.pk/docs/VISRatingScales.pdf