Karachi: The VIS Credit Rating Company Ltd. (VIS) has reaffirmed the entity ratings of Interloop Limited (ILP) at 'AA-/A1' (Double A minus/A one), maintaining a stable outlook, as detailed in their press release dated August 11, 2026. This action continues the ratings previously assigned on August 4, 2025. The reaffirmation highlights ILP's high credit quality and strong protection factors, with a medium- to long-term 'AA-' rating indicating a modest risk that may vary slightly with economic conditions. The short-term 'A1' rating suggests a strong likelihood of timely repayment of short-term obligations, supported by excellent liquidity factors.
Interloop Limited, a vertically integrated textile composite, specializes in hosiery, denim, knitted apparel, seamless activewear, and yarns. The company boasts a diversified export base and maintains long-standing relationships with major international retailers. With approximately 40,000 employees from 15 nationalities, ILP operates across six countries, with manufacturing facilities in Pakistan, Sri Lanka, and China, and marketing offices in the USA, Europe, and Japan. The company's registered office is situated in Faisalabad, Pakistan, and it has a subsidiary, Top Circle Hosiery Mills Co., Inc., located in Weissport, Pennsylvania, USA.
According to information available from the Pakistan Stock Exchange (PSX), the reaffirmed ratings reflect ILP's strong market position, vertically integrated operations, and sustained revenue growth. The company is actively pursuing capacity expansion and product diversification, particularly in the denim and apparel segments. Despite the hosiery business being the principal earnings contributor, ILP faced profitability pressures in FY25 due to margin compression in the apparel segment during its scale-up phase. However, signs of recovery were noted in 9MFY26. Elevated capital expenditure for expansionary initiatives resulted in higher leverage during FY25, but capitalization indicators improved in 9MFY26 as major projects neared completion and debt levels moderated. Liquidity remains adequate, with strong debt and cash flow coverage metrics.
The ratings are further supported by management's focus on operational efficiencies, disciplined debt management, and long-term cost optimization through sustainability initiatives. Nonetheless, ILP continues to face external risks from fluctuations in global cotton prices and evolving U.S. tariff policies, which may impact its operations moving forward.