Press Release

VIS Maintains Ratings of Nadeem Textile Mills Limited

Karachi, November 13, 2020: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of Nadeem Textile Mills Limited (NTML) at ‘BBB+/A-2’ (Triple B Plus/A-Two). Outlook on the ratings has been revised from ‘Rating Watch-Negative’ to ‘Stable’. Long term rating of ‘BBB+’ reflects adequate credit quality; protection factors are reasonable and sufficient. Risk factors are considered variable if changes occur in the economy. Short Term Rating of A-2 indicates good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are limited. Previous rating action was announced on April 24, 2020.

Nadeem Textile Mills Limited (NTML) is engaged in the manufacturing and sale of yarn business for more than three decades and operates via two spinning units located in Nooriabad and Kotri, Sindh. The rating derives impetus from long-standing association of the sponsors with the textile industry. NTML’s topline is derived from three major sources i.e. domestic sales (48%), direct export sales (23%) and indirect export sales (30%). The company’s cash conversion cycle, and overall gearing & leveraging, as of Sep’20, have been reviewed and gauged to be aligned with parameters for the assigned rating.

The revision in rating outlook reflects improvement in performance of NTML, with topline in Q1’FY21 being 7% higher than SPLY, albeit the pressure on gross margin persists. Given Covid-19 relief measures, the financing cost for the company has also reduced, reflecting positively on the bottom line. Even though concerns of a 2nd wave of Covid-19 remain elevated, we expect the order book for the industry to remain strong in the ongoing year, easing our business risk concerns. The assigned ratings remain dependent on maintenance of liquidity & capitalization metrics in line with the threshold.

For further information on this rating announcement, please contact Mr. Arsal Ayub (Ext: 216) or the undersigned (Ext: 101) at 35311861-66 or email at

Faheem Ahmed

Applicable Criteria: Industrial 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 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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