Karachi: VIS Credit Rating Company Limited has reaffirmed the entity ratings of Kamal Limited at ‘A/A1’, indicating good credit quality and a strong likelihood of timely repayment of short-term obligations. The outlook for these ratings remains stable, despite the ongoing challenges in Pakistan’s textile sector.

Kamal Limited, a family-owned textile manufacturer, operates a vertically integrated business model that includes spinning, weaving, and garment production. The company primarily exports value-added textile products to markets in Europe, Asia, the United States, Africa, and Australia. Domestically, it operates under the retail brand ‘So Kamal’, with online sales and 20 franchise locations.

The textile sector in Pakistan is grappling with economic cyclicality, competition, and structural issues. Cotton production saw significant fluctuations, with a 79% increase in FY24 followed by a 59.4% decline by October 2024. Projections for FY25 are uncertain due to limited cultivation areas and rising energy costs. Despite these challenges, there was growth in textile exports, particularly in value-added segments.

Kamal Limited’s ratings reflect strong revenue growth, improved profitability, and a stable financial profile. The company’s integrated operations contribute to cost efficiencies, and its export-led growth has bolstered internal cashflows. Liquidity has improved through better working capital management. Although the company is expanding through additional borrowings, its debt levels remain manageable.