Press Release

JCR-VIS Assigns Initial Entity Ratings to Kamal Limited

Karachi, December 31, 2018: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial entity ratings of ‘A-’/A-2’ (Single A Minus /A-Two) to Kamal Limited (KL). The medium to long-term rating of ‘A-’ denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely repayment, sound liquidity factors and good company’s fundamentals. Outlook on the assigned ratings is ‘Stable’.

KL is involved in export of fabric, home textile, and garments and also local sales through retail outlets & institutional sales. Shareholding is mainly vested with the sponsoring family which is actively involved in the day to day affairs of the company. Capital expenditure incurred in the last two years has resulted in higher sales and improved efficiency for the company. Moreover, KL’s strategy of keeping the proportion of value added products in the revenue mix above 75% positively impacted margins and profitability which is expected to be maintained, going forward. The company has a moderate financial risk profile emanating from strong coverages amid relatively high leverage indicators. The ongoing capacity enhancement with the installation of a spinning unit, along with increase in the capacity of weaving & stitching units are expected to boost KL’s competiveness and sales, which, in turn, would positively impact the overall profitability and cash flow generation. The ratings are dependent upon maintenance of debt service coverage, and gearing ratios.

For further information on this rating announcement, please contact the undersigned at 021-35311861-70 or Mr. Maimoon Rasheed at 042-35723411-13.

Javed Callea

Applicable rating criterion: Industrial Corporate (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