Karachi: VIS Credit Rating Company Limited has updated its outlook on Archroma Pakistan Limited’s (APL) credit ratings from ‘Stable’ to ‘Negative’ while maintaining its entity ratings at ‘AA/A-1’. This adjustment reflects concerns over economic pressures impacting APL’s key operational sectors.

According to VIS Credit Rating Company Limited, the revision is due to a weakening financial risk profile at APL during the fiscal year 2023 and the first half of 2024, primarily attributed to downturns in Pakistan’s textile and construction sectors. These industries are crucial for APL’s business, which involves the manufacturing and distribution of various chemical products. Despite the negative outlook, the ratings affirmation at ‘AA’ for the medium to long-term and ‘A-1’ for the short-term suggests APL still possesses strong credit quality and excellent liquidity factors.

VIS will continue monitoring APL’s financial health, especially in light of potential improvements in Pakistan’s macroeconomic environment, which could positively influence the local textile and construction markets and support APL’s recovery.