Aisha Steel Mills maintains ‘BBB+/A2’ rating with stable outlook

March 18, 2026 (MLN): VIS Credit Rating Company Limited has reaffirmed the long and short term credit ratings of Aisha Steel Mills Limited (ASL) at ‘BBB+/A2’, showing stable credit quality and a sound repayment capacity.

The medium to long term rating of ‘BBB+’ shows adequate credit strength with reasonable protection factors, while the short-term ‘A2’ rating indicates strong liquidity and a high likelihood of timely repayment of obligations.

The assigned ratings carry a Stable outlook, with the previous rating action reported on December 23, 2024.

Established in 2005 and commencing operations in 2012, ASL is a public limited company listed on the Pakistan Stock Exchange (PSX).

The company manufactures and sells cold rolled coils (CRC) and hot-dipped galvanized coils (HDG), catering primarily to local demand while steadily increasing exports to North America, Asia, Africa, Europe, and the Middle East.

Its products serve key industries including automotive, engineering, and home appliances.

ASL is part of the Arif Habib Group, a leading industrial and financial conglomerate in Pakistan with diversified interests spanning steel, cement, fertilizers, textiles, energy, real estate, and financial services.

The Group’s strong financial backing and industrial expertise have supported ASL in establishing a prominent position in Pakistan’s flat steel sector.

VIS highlighted that ASL benefits from an experienced management team, robust governance practices, and diversified end-user exposure.

The company has received consistent sponsor support, including substantial equity injections that strengthened the balance sheet and enhanced liquidity during periods of economic stress.

Despite its strengths, ASL faces challenges including dependence on imported hot rolled coils, exposure to international price volatility, and competition from low-priced imports.

Demand remains closely tied to macroeconomic conditions and industrial activity, particularly in the automotive sector.

However, recent regulatory measures to curb unfair imports, along with stabilization in key economic indicators, have supported a recovery in volumetric sales, while growing exports have provided additional revenue diversification.

Financially, ASL experienced profitability pressure in the preceding year due to subdued demand and pricing constraints, resulting in margin compression and net losses.

Performance has improved in the current period, supported by higher production volumes, better spreads, and reduced finance costs, leading to a modest return to profitability.

The company’s financial risk profile has strengthened through debt reduction and additional sponsor equity, improving gearing, leverage, and debt servicing capacity.

Liquidity has also improved, reflected in enhanced short-term coverage metrics and reduced dependence on short-term borrowings. VIS noted that the ratings remain sensitive to sustained improvement in profitability, liquidity, and coverage indicators.

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