Press Release

VIS assigns initial ratings to Suraj Cotton Mills Limited

Karachi, January 9, 2020: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘A+/A-1’ (Single A Plus/A-One) to Suraj Cotton Mills Limited (SCML). The medium to long-term rating of ‘A+’ denotes good credit quality with adequate protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of ‘A-1’ denotes high certainty of timely payments coupled with excellent liquidity and good fundamental protection factors. Outlook on the assigned rating is ‘Stable’.

SCML consists of four operating units of integrated spinning and weaving facilities at different locations. Majority of the shareholding is held by its associated company and sponsoring family. The ratings assigned reflect positive trajectory of sales, supported by augmentation in margins emanating from operational efficiencies and economies of scale. The ratings also incorporate sound liquidity profile, adequate coverages and comfortable leverage indicators. However, the ratings remained constrained by vulnerability of spinning sector to raw material prices and any adverse changes in regulatory duties. Further, corporate governance framework has room for improvement.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz (042-35723411-13, Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 201) 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 2020 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited