VIS Upgrades Master Textile Mills to ‘A+/A-1’ Amid Operational Improvements

Karachi, The VIS Credit Rating Company Limited has elevated the entity ratings of Master Textile Mills Limited (MTML) to 'A+/A-1' from 'A/A-1', reflecting the company's enhanced credit profile and stable business outlook.

According to VIS Credit Rating Company Limited, this upgrade signifies MTML’s robust financial health and promising business trajectory. The medium to long-term 'A+' rating denotes good credit quality with adequate protection factors, although subject to economic shifts. The 'A-1' short-term rating highlights a high likelihood of timely payment, underpinned by excellent liquidity and solid fundamental protections with minimal risk factors.

Established in 1992 and part of the diversified Master Group of Industries, MTML is a major player in the textile industry, with operations spanning yarn, fabric, and garments. The company’s business model, marked by vertical integration, has demonstrated resilience and adaptability in a sector characterized by economic cyclicality and intense competition.

The assigned ratings acknowledge the textile sector's medium business risk profile, driven by global economic fluctuations and domestic supply-side challenges. Despite these hurdles, MTML has shown consistent revenue growth and margin improvements over the past four years, benefiting from strategic operational enhancements.

Financially, MTML’s reduced long-term debt and strategic short-term investments have fortified its capital structure, supported by a strong internal cash generation capability. The Debt Service Coverage Ratio (DSCR) has consistently exceeded 4x, highlighting robust cash flow and debt serviceability. Future rating assessments will focus on the company’s ability to sustain profitability, capitalization, and cash flow coverage, along with liquidity improvements.

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