Press Release

VIS Reaffirms Entity Ratings of Zephyr Textile Limited

Karachi, December 04, 2019: VIS Credit Rating Company Limited (VIS) has reaffirmed entity ratings assigned to Zephyr Textile Limited (ZTL) at ‘BBB+/A-2’ (Triple B-Plus/A-Two). The medium to long-term rating of ‘BBB+’ denotes adequate credit quality coupled with reasonable protection factors. Moreover, risk factors are considered variable if changes occur in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on October 11, 2018.

The ratings assigned to ZTL take into account its moderate business risk profile emanating from a fairly diversified revenue stream within the textile industry and experienced senior management led by the sponsoring family. ZTL is a weaving & finishing unit and primarily operates in grey and finished fabric, towel and made-ups. The company has been making a gradual shift towards value-added textile products particularly commercial dying of knitted fabric for other companies and ladies fabric. The ratings are constrained by comparatively high gearing indicators and limited scale of operations, leading to heightened competitive challenges for the company.

FY20 is a challenging year for the company with considerable capex, the benefits of which would fully accrue from FY21. The impact of additional borrowing would increase the debt leverage & gearing indicators of the company and its financial risk profile. The ratings will be dependent upon timely completion of the expansion project within cost estimation and materialization of additional revenue. Any shortfall or delay in project may impact the ratings, going forward.

For further information on this rating announcement, please contact Mr. Maimoon Rasheed at (042) 35311861 or the undersigned at (021) 35311861-66 or email at

Javed Callea

Applicable rating criterion: Corporates (May 2019)

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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