Press Release

VIS Maintains Entity Ratings of The Thal Industries Corporation Limited

Karachi, February 01, 2021: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of The Thal Industries Corporation Limited (TICL) at ‘A-/A-2’ (Single A Minus/A-Two). The medium to long-term rating of ‘A-’ denotes good credit quality coupled with adequate protection factors. Moreover, risk factors may vary with possible changes in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely repayment, sound liquidity factors and good company’s fundamentals. Previous ratings action was announced on February 27, 2020.

TICL is part of an industrial conglomerate, ‘Almoiz Group’ engaged in the businesses of beverages, sugar, steel, power generation & textile. The company is engaged in manufacturing & sales of sugar and electricity, having crushing and generation capacities of 23,000 tons per day and 41 MW, respectively. The ratings assigned take into account its moderate business risk profile emanating from inherent cyclicality & price vulnerability of the sugar sector. The ratings draw comfort from notable improvement in revenue and profitability as the impact of input cost escalation due to higher sugarcane procurement price was more than offset by increase in sugar and molasses prices. The outbreak of COVID-19 and supply chain disruption led to slowdown in sugar deliveries to institutional clients during 9MFY20. However, significant quantity of sugar was sold during the last quarter of FY20. Further, TICL along with two of its group companies have abandoned the plan to acquire controlling stake in a foreign sugar mill. Outlook on the assigned rating has been revised from ‘Rating Watch-Developing’ to ‘Positive’.

Liquidity profile of the company is considered adequate. In line with profits, the company generated higher funds from operations (FFO) during FY20, leading to improvement debt service coverage. Total debt stood lower at end-FY20 mainly on account of scheduled long-term loan repayments and reduced outstanding balance of short-term borrowings at end-FY20 due to reduction working capital. Resultantly, leverage indicators have improved on a timeline basis due to reduced debt utilization and equity accumulation. Going forward, the ratings will be dependent upon maintenance of performance indicators particularly profit margins, debt coverage, and leverage around current levels; any notable deterioration would be considered as a credit negative event.

For further information on this rating announcement, please contact Syed Fahim Haider at 042-35723411-13 (Ext: 8006) or the undersigned at 021-35311861-70 (Ext. 201) or email at

Faryal Faheem Ahmed
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 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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

VIS Credit Rating Company Limited