Interloop Limited’s credit profile remains strong, with VIS maintaining its long-term and short-term entity ratings at ‘AA-/A1’ and a Stable outlook.
Interloop Limited has announced that VIS Credit Rating Company Limited (VIS) has reaffirmed the company’s entity ratings at ‘AA-/A1’ (Double A Minus/A One). The rating action was announced by VIS on August 11, 2026, and subsequently communicated by Interloop to the Pakistan Stock Exchange on August 12, 2026.
According to VIS, the ‘AA-’ long-term rating indicates high credit quality, with risk factors considered very low, while the ‘A1’ short-term rating reflects a strong likelihood of timely repayment of short-term obligations supported by excellent liquidity factors. The outlook on the assigned ratings remains Stable.
VIS highlighted Interloop’s strong market position and vertically integrated operations as key factors supporting the ratings. The company is a diversified textile manufacturer with operations spanning hosiery, denim, knitted apparel, seamless activewear and yarns. It has built a broad export base and maintains long-standing relationships with major international retailers.
The rating agency also noted Interloop’s extensive operational footprint. The company employs approximately 40,000 people across 15 nationalities and operates across six countries, with manufacturing facilities in Pakistan and Sri Lanka, a manufacturing facility and sourcing office in China, and marketing offices in the United States, Europe and Japan.
Interloop continues to pursue capacity expansion and product diversification, particularly in its denim and apparel businesses. VIS said the hosiery business remains the company’s main earnings contributor, although consolidated profitability came under pressure during FY2025 because of margin compression in the apparel segment as it went through its scale-up phase. Profitability, however, showed signs of recovery during 9MFY2026.
The rating agency further pointed out that higher capital expenditure associated with Interloop’s expansion initiatives increased leverage during FY2025. At the same time, improved capitalization during 9MFY2026, as major projects reached completion and debt levels were moderated, supported the company’s financial position. VIS said liquidity remains adequate, while debt and cash-flow coverage metrics continue to be strong.
Management’s focus on improving operational efficiency, maintaining disciplined debt levels and pursuing long-term optimization through sustainability initiatives also supports the company’s credit profile.
However, VIS cautioned that Interloop remains exposed to fluctuations in global cotton prices and evolving US tariff policies, which could pose risks to the company going forward.
Overall, the reaffirmation of the ‘AA-/A1’ ratings reflects VIS’s continued confidence in Interloop Limited’s market position, integrated business model, revenue growth, liquidity and financial strength, while the Stable outlook indicates no immediate change in the company’s credit profile is anticipated based on the rating agency’s assessment.
