Lahore: The Pakistan Credit Rating Agency Limited (PACRA) has maintained the entity ratings of Reliance Cotton Spinning Mills Limited, highlighting the company's prominent position in Pakistan's spinning sector. The company benefits from its affiliation with the Sapphire Group, a conglomerate with extensive interests across various sectors including textiles, retail, dairy, and energy. Reliance Cotton is recognized for its high-quality yarn and maintains a diverse customer base across international markets while strengthening its domestic footprint.
According to PACRA, the economic environment in Pakistan has shown signs of recovery with lower interest rates and a stable exchange rate. Despite these improvements, the textile industry continues to grapple with high energy costs, elevated taxation, and limited domestic cotton supply. In response, Reliance Cotton is focusing on renewable energy sources and group restructuring to ensure long-term growth. The company recorded a revenue increase of 5.3% in FY25, reaching PKR 15.8 billion, with a notable shift towards local sales.
Reliance Cotton's business risk profile is supported by a stable investment income and a moderately leveraged capital structure. The company holds an investment portfolio of PKR 3.2 billion, primarily in Sapphire Group's subsidiaries and associated companies. As the company undergoes group-level restructuring, maintaining profitability and stable cash flows from core operations will be crucial for sustaining its ratings.
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