Press Release

VIS Reaffirms Entity Ratings of Siara Textile Mills (Pvt.) Limited

Karachi, March 26, 2020: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Siara Textile Mills (Pvt.) Limited (STML) at ‘BBB-/A-2’ (Triple B-Minus/A-Two). The medium to long-term rating of ‘BBB-’ denotes adequate credit quality with reasonable and sufficient protection factors. Moreover, risk factors are considered variable with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and fundamental protection factors. Outlook on the assigned rating is ‘Stable’. The previous rating action was announced on January 28, 2019.

STML is a small-sized spinning unit, with shareholding vested with the sponsoring family who is actively involved in day-to-day operations of the company. The assigned ratings take into account gradual improvement in cash flows along with sound coverages. Overall liquidity indicators have remained adequate. The company has also been able to increase sales and gross margins on back of higher yarn price, though net margins have remained nominal on a timeline basis. The ratings are constrained by nearly full capacity utilization, vulnerability of spinning sector to raw material prices and any adverse changes in regulatory duties. Some increase in leverage indicators have been witnessed lately, maintenance of that within acceptable limits is considered imperative for ratings, going forward.

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

Faryal Ahmad Faheem
Deputy CEO

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 .

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