Press Release

VIS Maintains Entity Ratings of Indus Home Limited

Karachi, April 29, 2020: VIS Credit Rating Company Limited (VIS) has maintained entity ratings of Indus Home Limited (IHL) at ‘A-/A-2’ (Single A Minus/A-Two). The assigned ratings have been placed on ‘Rating Watch-Developing’ status. Long term entity rating of ‘A-’ reflects good credit quality, adequate protection factors. Risk factors may vary with possible changes in the economy. Short Term Rating of ‘A-2’ indicates good certainty of timely payment, liquidity factors and company fundamental factors are sound. Access to capital markets is good. Risk factors are small. The previous rating action was announced on May 8, 2019.

IHL is primarily engaged in the production and export of griege and finished terry cloth and other textile products. At present, the company’s operations encompass weaving, dyeing and fabrication which are carried out through a towel manufacturing and finishing facility, located in Raiwind near Lahore. IHL has installed a total of 120 air jet looms. IHL is a wholly owned subsidiary of Indus Dyeing and Manufacturing Company Limited.

The revision in rating outlook reflects prevailing uncertainty in textile sector dynamics due to coronavirus outbreak, prolonged lockdown, overall contraction in demand and challenging economic environment. It is expected that the entire value chain of the textile industry will be impacted by these developments. Status of the assigned rating is therefore uncertain as an event of deviation from expected trend has occurred; additional information will be necessary to take any further rating action, warranting a ‘Rating Watch-Developing’ status. Given the low leveraged capital structure and sound financial profile, it is expected that ratings will remain stable post recovery of the ongoing situation; nevertheless as scenario is evolving rapidly, VIS will closely monitor and will accordingly take action to resolve the outlook status.

For further information on this rating announcement, please contact Mr. Javed Callea (Ext: 201) or Ms. Muniba Abdullah, CFA (Ext. 215) at 021-35311861-70 or email at info@vis.com.pk .

Faryal Ahmad Faheem
Deputy CEO

Applicable Rating Criteria: Industrial Corporates (April 2019)
https://s3-us-west-2.amazonaws.com/backupsqlvis/docs/Corporate-Methodology-201904.pdf

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 .