Press Release

VIS Reaffirms Entity Rating of International Textile Limited

Karachi, May 02, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of International Textile Limited at ‘A/A-2’ (Single A/ A-Two). Medium to long-term rating of ‘A’ signifies good credit quality; protection factors are adequate. Risk factors may vary with possible changes in economy. Short term rating of ‘A-2’ indicates good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the assigned ratings remains ‘Stable’. Previous rating action was announced on April 18, 2023.

International Textile Limited (‘ITL’ or ‘the Company’) is a vertically integrated textile composite involved in spinning, sizing, yarn processing, fabric manufacturing, terry dyeing and bleaching. ITL also trades and exports knitted and woven fabrics, towels, and other textile products internationally.

Assigned ratings incorporate the medium business risk profile of the textile sector in Pakistan, marked by exposure to economic cyclicality and moderate competition. The sector's performance is influenced by broader economic conditions, rendering it susceptible to demand fluctuations driven by economic factors. Furthermore, as a substantial contributor to total exports, the textile industry faces exposure to global economic cyclicality, geopolitical challenges, and liquidity constraints due to time involved in sales tax refunds. Supply-side risks, including local cotton crop production and reliance on imported raw materials, expose the sector to exchange rate risk.

Assigned ratings take into account the Company’s business updates; the Company experienced a decrease in sales volume of 30% Y/Y. Despite challenges with increasing costs of inputs, the Company's profitability metrics registered improvement, mainly attributed by sharp rupee depreciation. The Company's geographic sales mix showed a significant portion of exports coming from the US market. Client concentration remains, with the top ten clients consistently accounting for around three-fourth of total sales. In 1H’FY24, the Company recorded a 10% growth in sales, while gross margins are consolidating with a relatively stable rupee., however, net margins declined amid higher finance cost.

The assigned ratings also account for the Company’s financial risk profile. Cashflow coverages and liquidity position remained healthy during the review period. Further, with internal cash generation, short term borrowings of the Company has declined which resulted an improvement in capitalization metrics. Going forward, maintenance of healthy liquidity, cashflow and capitalization indicators will remain key rating drivers.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at

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