PACRA Maintains Entity Ratings of Ahmed Fine Textile Mills Limited : AsiaNet-Pakistan

PACRA Maintains Entity Ratings of Ahmed Fine Textile Mills Limited

February 28, 2018 | General Business News | Share:

Lahore, February 28, 2018 (PPI-OT): The ratings reflect adequate business profile of Ahmed Fine Textile Mills – jointly owned by Fazal Group and Hussain Group. The company, is engaged primarily in spinning business and also has presence in weaving segment through a wholly owned subsidiary – Fazal Rehman Fabrics Limited. The growth in topline of the company has remained limited due to low exports; turnover in local market is impressive. Low margins of the company are inline with struggling spinning sector due to high local cotton prices and ban on import of cotton from India.

However, duty on import of yarn and recent export package has provided a breather to the industry. Ahmed Fine’s financial risk is strong reflected by (i) relatively efficient working capital cycle, (ii) healthy coverages, and (iii) moderately leveraged capital structure. Going forward, in absence of any debt-driven expansion in the medium-term, financial risk is expected to remain at the same level. The ratings also incorporate the experienced management team and the entity’s association with Fazal Group. This should bring improvement in overall governance structure of the Group in future.

The ratings are dependent on sustaining business margins while maintaining financial risk at low level. Any shift from current business strategy, impacting the risk profile of the entity, may negatively affect the ratings.

For more information, contact:
Analyst
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore – Pakistan
Tel: +9242 586 9504 -6
Fax: +9242 583 0425
Email: hammad.rashid@pacra.com
Web: www.pacra.com

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Category: General Business News