Press Release

VIS assigns initial ratings to Gohar Textile Mills (Pvt.) Limited

Karachi, March 26, 2019: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A/A-1’ (Single A /A- One) to Gohar Textile Mills (Pvt.) Limited (GTML). The medium to long-term rating of ‘A’ denotes good credit quality with adequate protection factors. Moreover, the risk factors may vary with possible changes in economy. The short-term rating of ‘A-1’ denotes high certainty of timely payment, liquidity factors are excellent and supported by good fundamental protection factors. Outlook on the assigned ratings is ‘Stable’.

The ratings assigned to GTML take into account its long experience in export oriented value-added textile segment, positive momentum in profitability on a timeline basis, sound liquidity and reasonable experience of management team in the relevant industry. The ratings derive strength from sustenance of healthy margins, low leverage indicators with minimal reliance on long-term borrowings and comfortable debt service coverages. GTML is a vertically integrated textile unit consisting of an in-house yarn manufacturing & dyeing, fabric processing (dyeing & finishing), laundry, cutting, printing and manufacturing facility. GMTL operates as a family owned business with the shareholding vested among individuals of the same family. The ratings remain constrained by the inherent business risk volatility in the textile sector. The ratings remain dependent on maintenance of margins and low leveraged capital structure, realization of projected business targets, incremental cash flow generation from recent capital expenditure coupled with evolution of sector dynamics.

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: 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 2019 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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