Lucky Textile Mills Limited Receives Rating Upgrade from VIS Credit Rating Company

Karachi: VIS Credit Rating Company Limited has announced an upgrade in the entity ratings of Lucky Textile Mills Limited (LTML) to ‘AA-/A1+’ from ‘AA-/A1’. The upgrade reflects the company’s enhanced credit quality and its ability to ensure timely repayment of short-term obligations, supported by strong liquidity factors. The outlook for the rating remains ‘Stable’.

According to VIS Credit Rating Company Limited, LTML, a public unlisted entity under the Yunus Brothers Group, benefits from diverse operations across sectors such as power generation, cement, and textiles. The textile company, based in Karachi, is noted for its comprehensive operations in spinning, weaving, processing, and stitching, with a focus on home textiles, garments, and fabric.

The assigned ratings consider the inherent medium business risk in Pakistan’s textile sector, which is influenced by economic fluctuations and competitive pressures. The sector’s reliance on both local and imported raw materials exposes it to exchange rate risks, while global economic conditions and domestic fiscal policies add layers of uncertainty. Despite these challenges, LTML’s strong sponsorship, diversified investments, and successful business integration have facilitated revenue growth and reduced client concentration in exports, contributing to stable profitability margins.

LTML’s financial structure has benefited from an expanded equity base and reduced debt, improving its gearing and leverage ratios. Although the Debt Service Coverage Ratio has slightly declined due to increased long-term debt obligations, the company maintains a robust financial position. Looking ahead, maintaining profitability margins and financial ratios will be crucial for sustaining its ratings.

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