VIS assigns initial long-term 'BB+' rating to ITANZ Technologies

September 23, 2026 (MLN): ITANZ Technologies Limited has received an initial entity rating of 'BB+/B' (Double B Plus/B) from VIS Credit Rating Company Limited, with the Stable outlook applied to both ratings.

The medium to long-term 'BB+' rating signals that the company's obligations are likely to be honoured, though the protection factors behind this assessment could soften if economic conditions shift, and the overall credit quality may fluctuate within this band over time.

On the short-term side, the 'B' rating flags an element of uncertainty around whether short-term debt will be repaid on schedule, given limited liquidity buffers.

VIS attributed the initial rating to ITANZ's expanding footprint in Pakistan's IT and IT-enabled services space, underpinned by a broad product mix covering IT services, software development and implementation, software licensing and BPO.

At the same time, the agency flagged a concentration risk within the group: ITANZ Infinity has accounted for an average 87% of total group revenue over the past three years, of which only around 10%, Rs117mn was settled in cash, with the remainder cleared through accounting offsets linked to the FY26 share-purchase deal.

Broadening the revenue base across customers and geographies remains a priority for the company from here on.

Profitability picked up sharply in FY26, though the gain was largely a function of acquisition-related accounting entries such as notional interest income and a bargain purchase gain, rather than underlying performance, which stayed roughly on par with FY25 once adjusted.

The acquisition has also pushed leverage higher and added medium-term cash flow pressure through deferred consideration spread over five years.

While ITANZ's financial risk profile is helped by its limited use of bank debt, liquidity and cash-flow coverage remain tight, especially once acquisition-linked obligations and FFO adjustments are factored in.

VIS noted that building sustainable cash flows from ITANZ Infinity, together with deeper diversification across customers and geographies, will remain central to future rating decisions, alongside how well the company executes on its recently won international projects.

Listed on the Pakistan Stock Exchange, ITANZ Technologies Limited took its current form during FY25, when ITANZ Technology (Private) Limited was folded into Zahur Cotton Mills Limited under a Scheme of Arrangement sanctioned by the Lahore High Court, effective October 1, 2023.

The merger prompted Zahur Cotton Mills to rebrand as ITANZ Technologies and pivot its operations toward information technology and IT-enabled services.

The transformation continued into FY26, when the company picked up a 51% controlling stake in ITANZ Infinity Pty Ltd, an Australian firm specialising in software development, digital transformation, consultancy and allied technology services.

The company's operations are built around proprietary platforms such as the Intelligent City Platform (ICP), UBR and CAMS, complemented by implementation IP and Resource-as-a-Service offerings.

Beyond this, the group delivers enterprise technology implementation, data integration, cloud and automation services through partnerships with multiple technology vendors, serving clients across government, utilities, financial services, healthcare and manufacturing, among other sectors.

Copyright Mettis Link News