Press Release

VIS Reaffirms Entity Ratings of Artistic Denim Mills Limited

Karachi, April 30, 2025: VIS Credit Rating Company Limited (VIS) reaffirms entity ratings of Artistic Denim Mills Limited at ‘A-/A2’ (Single A minus/A two). Medium to long term rating of ‘A-’ indicates Good credit quality; Protection factors are adequate. Risk factors may vary with possible changes in the economy. Short term rating of 'A2' indicates Good likelihood of timely repayment of short-term obligations with sound short-term liquidity factors. Outlook on the assigned ratings remain ‘Stable’. Previous rating action was announced on March 29, 2024.

Artistic Denim Mills Limited (“ADML” or “the Company”) operates as a vertically integrated denim fabric and garment manufacturer. ADML was incorporated in 1992 as a Public Limited Company and is listed on the Pakistan Stock Exchange (PSX: ADMM). Its registered office and factory premises are located in Korangi Industrial Area, Karachi. The core business of ADML is to manufacture and export garments, rope dyed denim fabric, recycled fiber, yarn and value-added textile products.

The assigned ratings reflect medium business risk profile of the textile sector, characterized by economic cyclicality and intense competition. Sector performance is closely tied to both domestic and global economic conditions, given its export-oriented nature, making it vulnerable to demand fluctuations.

The ratings are supported by ADML’s sound financial risk profile, underpinned by a relatively strong equity base and sponsor backing. While profitability margins have weakened due to high energy costs, elevated interest rates and USD to PKR exchange rate stability during the year, the Company’s liquidity and coverage metrics have remained adequate. The Company is also in process of expanding its solar power capacity by end of FY25, which is expected to improve profitability indicators, alongside falling interest rates.

Moving forward, improvement in profitability and capitalization indicators will remain important for the assigned ratings.


For further information on this ratings announcement, please contact on 021-35311861-64 or email at info@vis.com.pk.






Applicable Rating Criteria:

Industrial Corporates
https://docs.vis.com.pk/docs/CorporateMethodology.pdf

VIS Issue/Issuer Rating Scale
https://docs.vis.com.pk/docs/VISRatingScales.pdf

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2025 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .