Press Release

JCR-VIS assigns Initial Ratings of Rajby Textiles (Private) Limited

Karachi, October 27, 2016: JCR-VIS Credit Rating Company Limited (JCR-VIS) has assigned initial ratings of Rajby Textiles (Private) Limited (RTPL) at ‘A-/A-1’ (Single A Minus/A-One). Outlook on the assigned ratings is ‘Stable’.

RTPL is part of Rajby Group (RG) operating in textile field for about forty years. RG’s operations over the last two decades have been concentrated in export oriented garment stitching under the umbrella of Rajby Industries and denim manufacturing performed at Rajby Textiles (RT) since Feb’2005. RT upgraded to a state of the art denim manufacturing facility in 2011. RTPL took over operations of RT from July’2015 onwards. An expansion plan doubling the capacity of RTPL is underway, expected to be complete by 4Q-FY17.

The rating takes into account the sound sponsor profile and their successful growth in the garment and denim manufacturing and in its export marketing. The rating also relies upon the current and projected strong liquidity and capitalization of RTPL along with the ability to efficiently manage production capacity utilization to enhance revenue generation.

Over the last few years, with the increase in production capacity, RTPL has been able to diversify revenue streams through increased sales in the international market, while supplying majority proportion to a group company. This is achieved through the use of state-of-the-art production machinery (sourced from Germany and Belgium) and a motivated work-force.

Y-o-Y growth in fund generation provides RTPL with a strong debt servicing ability. The company utilizes debt for the acquisition of imported machinery and for working capital requirements. However, despite growth in additional debt for expansionary purposes, leverage indicators and servicing ability are projected to remain healthy. In line with current production trends, RTPL envisages that FY20 onwards, all working capital requirements will be met through internal cash generation. Rating would be dependent upon maintaining of projected risk profile, going forward.

For further information on this rating announcement, please contact the undersigned (Ext: 241) or Mr. Javed Callea (Ext: 234) at 35311861-70 or fax to 35311872.

Mohammed Khalid Ali

Applicable Criteria: Industrial Corporates (May 2016)

Information herein was obtained from sources believed to be accurate and reliable; however, JCR-VIS Credit Rating Company Limited (JCR-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. JCR-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. JCR-VIS is not an NRSRO and its credit ratings are not NRSRO credit ratings. JCR-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 2016 JCR-VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to JCR-VIS.

JCR-VIS Credit Rating Company Limited