Press Release

VIS Upgrades Entity Ratings of Artistic Garment Industries (AGI Denim) (Private) Limited

Karachi, June 11, 2024: VIS Credit Rating Company Limited has upgraded the entity ratings of Artistic Garment Industries (AGI Denim) (Private) Limited from ‘A/A-2’ (Single A/A-Two) to 'A+/A-1' (Single A Plus/A-One). Medium to long-term rating of ‘A+’ signifies good credit quality and adequate protection factors. Risk factors may vary with possible changes in the economy. Short-term rating of ‘A-1’ indicates high certainty of timely payment; liquidity factors are excellent and supported by good fundamental factors. Risk factors are minor. Outlook on the assigned ratings remains ‘Stable’. Previous rating action was announced on September 21, 2023.
AGI Denim is a complete end-to-end enterprise focused on the production and export of denim fabric, yarn, and an extensive array of ready-made denim garments. With an operating track record of more than 3 decades, the Company undertakes all stages of the production cycle, including spinning, weaving, dyeing, and finishing.
The assigned ratings reflect the medium business risk profile inherent in Pakistan's textile sector, characterized by exposure to economic cyclicality and strong competition. Performance within this sector is heavily influenced by broader economic conditions, making it susceptible to demand fluctuations driven by both domestic and international economic factors, particularly its reliance on exports. Additionally, supply-side risks such as local cotton crop production and dependence on imported raw materials expose the sector to considerable exchange rate risk.
The assigned rating takes into account the notable growth in topline and improved gross margins in FY23. During 9M’FY24, topline grew by 43% vis-à-vis SPLY due to higher volumes and selling prices. Overall profitability displayed growth in absolute terms during the review period despite significant increase in financial charges.
The revision in rating also takes into account the Company’s financial risk profile, which depicted improved liquidity and cashflow position on the back of higher profitability during the review period. Despite fluctuations, Debt service coverage ratio (DSCR) remained sound primarily on the back of higher funds from operations (FFO). Furthermore, current ratio improved during the review period. Notable improvement in gearing and leverage indicators was also depicted on the back of equity growth and decline in overall debt. Going forward, ratings remain underpinned on maintaining sound capitalization profile.

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

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