Press Release

JCR-VIS Re-affirms Entity Ratings of Indus Dyeing & Manufacturing Co. Ltd. at A/A-2

Karachi, January 08, 2008: JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has reaffirmed the medium to long-term entity rating of A (Single A) and short-term rating of A-2 (A Two) assigned to Indus Dyeing & Manufacturing Company Ltd. (IDMCL). The outlook on the medium to long-term rating is ‘Stable’.

The ratings re-affirmation takes into account the management’s track record of performance in the textile industry and their focused strategy of containing the leverage of the company in line with the industry’s risk dynamics. The company has regularly invested in BMR and expansion of plant facilities to mitigate the pressure on gross margins being experienced across the industry with intensifying competition in the global markets. Further, the management is also pursuing diversification and has invested in a joint venture for manufacture and sale of towels based on Pakistan’s competitiveness in coarser counts.

While the overall financial indicators remain healthy, the company is expected to face pressure in debt servicing in the next two years due to concentrated maturities in these years while margins have also thinned during the current year due to high cotton prices which the industry is unable to pass on to the customers due to competitive pressures. However, we understand that the management is making interim liquidity arrangements to cover the anticipated stress period.

JCR-VIS is further monitoring the impact of the current political and law and order situation of the country and rating actions will be updated as and when required.

For further information on this rating announcement, please contact Mr. Safdar Kazi ( or the undersigned ( at 021-5311861-70 or fax to 021-5311872.

Sadaf Aliuddin
Unit Head

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 2008 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