Faisalabad: The VIS Credit Rating Company Limited has reaffirmed the entity ratings of Interloop Limited at 'AA-/A1' (Double A minus/A one), according to a press release issued on August 4, 2025. The medium to long-term rating of 'AA-' signifies high credit quality with strong protection factors. The short-term rating of 'A1' indicates a strong likelihood of timely repayment of short-term obligations, supported by excellent liquidity factors. The outlook on these ratings remains stable.
Interloop Limited, a vertically integrated textile company, specializes in hosiery, denim, knitted apparel, seamless activewear, and yarns. The company has built a diversified export base and maintains long-standing relationships with major international retailers. Employing 37,000 individuals across 15 nationalities in six countries, Interloop Limited operates an extensive industrial infrastructure in Pakistan, an associate manufacturing facility in Sri Lanka, a manufacturing unit, and a sourcing office in China, along with marketing services offices in the United States, Europe, and Japan. The company's registered office is located at 15-A Peoples Colony No. 1, Faisalabad.
The reaffirmation of the ratings reflects Interloop Limited's robust market position, integrated operations, and stable revenue scale. The company is actively pursuing capacity expansion and product diversification, particularly in the denim and apparel segments. While the hosiery division continues to generate stable earnings, consolidated profitability has been impacted by margin compression in the apparel segment, which is still in its ramp-up phase. Ongoing capital expenditure efforts have kept capitalization metrics constrained, although there are gradual improvements in gearing. Liquidity remains adequate, but cash flow-based coverage indicators have weakened due to reduced profitability.
According to information available from the Pakistan Stock Exchange (PSX), Interloop Limited's management is focused on operational efficiency, particularly within the apparel segment. The company is committed to capping debt levels and achieving long-term cost savings through sustainability initiatives, including the planned expansion of solar energy capacity. However, external risks persist, most notably the potential impact of fluctuations in global cotton prices and changes in U.S. tariff policies, which will remain key challenges for the company moving forward.