Lahore, August 09, 2019 (PPI-OT):The ratings of M.Y. Bari Mills (Pvt.) Limited (Bari Mills) reflect its improving business profile emanating from growth in revenues and profitability. Bari Mills is a family owned small scale private company operated by a seasoned business family of Karachi. The Company is primarily an export oriented, towel manufacturing concern. Bari Mills is in the process of expanding its manufacturing facilities which is proving key driver in increase in revenues.
Further, currency devaluation has boded well for the Company. Whereas, towel and denim industry continues to surge forward on the back of Pakistan’s cotton which is more suitable for coarse counts yarn. The Company enjoys strong margins in line with its peers. On standalone basis, the Company’s concentration levels – both customer and geographical – are high with majority of company revenues (~62%) emanates from a single customer.
However, the ratings comfort from the Bari group’s overall customer base and recent diversification in customers. The Company has a leveraged capital structure, though coverages remain strong. Going forward, in absence of any further debt-driven expansion in the medium-term, financial profile is expected to further improve.
The ratings are dependent on sustaining growth in revenues and profitability. Sustaining margins and reducing customer concentration, while maintaining financial risk at low level is critical. Meanwhile, strengthening of governance framework for better oversight of strategic affairs is considered essential.
For more information, contact:
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
Category: General Business News