Press Release

VIS Assigns Initial Ratings to Sohail Textile Mills Limited
 

Karachi, August 9, 2021: VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB-/A-2’ (Triple B Minus/A-Two) to Sohail Textile Mills Limited (SOT). The medium to long-term rating of ‘BBB-’ denotes adequate credit quality coupled with reasonable and sufficient protection factors. Moreover, risk factors are considered variable if changes occur in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payment coupled with sound company fundamentals and liquidity factors. Outlook on the assigned ratings is ‘Stable’.

SOT is a part of Ayesha Group, which is one of the renowned players in yarn spinning industry of Pakistan. Shareholding of the company is vested with the sponsoring families. The assigned ratings take into account extensive experience, spanning nearly half a century, of the sponsoring family, and established relations with customers.

The ratings incorporate some growth in sales and improvement in gross margins in the ongoing year in tandem with growth in textile sector. Liquidity is considered adequate in terms of coverages. Given modest growth in equity base due to limited profitability and increase in borrowings, leverage indicators have remained high. The ratings are constrained by small scale of operations and vulnerability of spinning sector to raw material prices. The ratings will remain sensitive to any further increase in gearing, maintenance of adequate coverages and sustained improvement in net margins.

For further information on this rating announcement, please contact Ms. Tayyaba Ijaz at 042-35723411-13 (Ext. 8004) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at info@vis.com.pk


Faryal Ahmad Faheem
Deputy CEO


Applicable rating criterion: Corporates (May 2019)
https://www.vis.com.pk/kc-meth.aspx

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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