VIS reaffirms Image Pakistan Limited's long-term rating at A-

May 18, 2026 (MLN): VIS Credit Rating Company Limited has reaffirmed the entity ratings of Image Pakistan Limited at 'A-/A2', maintaining a Stable outlook on the assigned ratings.

The reaffirmation reflects the garment maker's adequate credit quality and good likelihood of meeting both its short and long-term financial obligations. The previous rating action on the company was announced on April 15, 2025.

The ratings are underpinned by the company's established brand presence and well-defined positioning in Pakistan's local fashion market.

VIS noted that Image's ability to align its product offerings with prevailing fashion trends, combined with a growing retail footprint, has supported continued revenue expansion despite a challenging macroeconomic backdrop.

The rating agency flagged a high to moderate business risk profile for Pakistan's retail clothing sector, citing inflationary pressures that have eroded consumer purchasing power, dampened demand, and heightened price sensitivity.

The sector also contends with a relatively elevated fixed cost structure. On a positive note, VIS highlighted rising demand for ready-to-wear apparel, driven by shifting consumer preferences toward fast fashion, urbanization, e-commerce growth, and the appeal of convenience and affordability.

On the financial side, VIS described Image Pakistan's capital structure as satisfactory, with robust coverage indicators and a healthy Debt Service Coverage Ratio (DSCR).

However, liquidity remains a concern, with elevated inventory levels lengthening the cash conversion cycle and tying up working capital.

Management has outlined plans to address the inventory buildup and normalize turnover over the medium term. VIS noted that a sustained improvement in liquidity, alongside a prudent capital structure, will be key considerations in future rating assessments.

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