Press Release

VIS Maintains Entity Ratings of International Steels Limited

Karachi, November 24, 2023: VIS Credit Rating Company Ltd. (VIS) has revised the rating outlook of International Steels Limited ('ISL' or 'the Company') from 'Rating Watch - Developing' to 'Stable'. The entity ratings have been maintained at 'A+/A-1' ( Single A Plus/A-One). The medium to long-term rating of 'A+' denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of 'A-1' signifies high certainty of timely payment with excellent liquidity and good company fundamentals. Risk factors are minor. Previous rating action was announced on April 10, 2023.

International Steels Limited (ISL) was incorporated in 2007 and is one of Pakistan’s two major producer of flat steel products with an annual production capacity of 1,000,000MT. The primary activity of the company is manufacturing cold rolled steel coils (CRC), hot dipped galvanized coils (HDGC), and color coated coils (CCC).

"Assigned ratings reflect its stable financial performance amidst the economic challenges faced during the fiscal year 2023. Financial resilience was demonstrated by sustained profit margins, supported by declining international steel prices and strategic reductions in borrowings limiting effects of rising interest rates. Nevertheless, despite improvement in margins, the bottom line was lower due to a decline in off-takes and thus reduced quantum in revenue.

Assigned ratings also consider the Company’s healthier capitalization profile on account of reduction in debt utilization. This was a result of management’s strategy of limiting inventory build-up thus reducing the need for borrowing to meet working capital requirements. Ratings also incorporate ISL’s sound liquidity profile with healthy overall benchmarks. The Company's overall debt servicing profile remains healthy with a Debt Servicing Coverage Ratio (DSCR) of 2.6x (FY22: 3.2x) in FY23.

Going forward, ratings will remain sensitive to improvement in topline and profitability, as well as maintenance of capitalization, liquidity, and coverage metrics in line with assigned ratings. Moreover, continuation of inventory management practices adopted by the Company during FY23 will also remain an important consideration.

For further information on this ratings announcement, please contact Saeb Muhammad Jafri at 021-35311861-64 (Ext. 202) and/or the undersigned at 021-35311861-64 (Ext. 207) or email at

Sara Ahmed

Applicable Rating Criteria: Corporates (May 2023):

VIS Issue/Issuer Rating Scale

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