Press Release

JCR-VIS assigns Initial Ratings of Mustaqim Dyeing & Printing Industries (Pvt) Ltd.

Karachi, December 13th, 2018: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘A-/A-2’ (A Minus/A-Two) to Mustaqim Dyeing & Printing Industries (Private) Limited (MDPIPL). Outlook on the assigned ratings is ‘Stable’.

Mustaqim Dyeing & Printing Industries (Private) Limited (MDPIPL) is a part of G&T group, which has been in existence for over six decades with presence in various sectors including textile, plastic resin and power generation. MDPIPL is engaged in manufacturing, processing and export of yarn, fabric, home textiles, towels and socks.

The assigned ratings take into account extensive experience of sponsors, long-standing relationship with clients, sound liquidity profile, and growth in operating profitability on timeline basis. Ratings are constrained by increasing leverage indicators and client-wise concentration in sales.

More than three-fourth of the company’s sales are catered to export markets. Although export sales remain forte of the company, net sales have increased during the last three years primarily on the back of increase in domestic sales of yarn. Client-wise concentration is witnessed in sales, however going forward, a downward trend may be observed in client concentration as the management plans to expand its operations to other countries.

Gross profit of the company has varied in line with top-line of the company. Despite decline in margins, profit before tax witnessed growth on account of higher revenues in FY18. Going forward, the management is expecting sizeable growth in top-line of the company on the back of capacity expansion and increase in sales to other geographical markets. However, maintaining margins is considered essential from ratings perspective.

The equity base of MDPIPL has grown on a timeline basis owing to retention in profits. However, leverage indicators have also increased due to growth in borrowings to fund capacity expansion. Assigned ratings are dependent on maintenance of the leverage indicators within manageable levels going forward. Liquidity profile of the company is considered strong in view of healthy cash flows in relation to outstanding obligations.

For further information on this rating announcement, please contact the undersigned at (Ext: 201) at 35311861-70 or fax to 35311872.

Javed A. Callea

Applicable Criteria: Industrial Corporates (May 2016)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited VIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS, the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2018 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.

JCR-VIS Credit Rating Company Limited