AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Lahore, September 30, 2019 (PPI-OT): Tata Textile Mills Limited – a public listed company – primarily engaged in the manufacturing and sale of different varieties of yarn is majorly owned by Mr. Anwar Tata’s group. Tata group currently owns three textile mills i.e. Island, Salfi and Tata Textile Mills Limited. The group is also diversified into power and food sectors. Spinning industry has recently suffered as lower demand for cotton yarn from China owing to trade war with USA has led to lower exports volume. Tata Textile’s margins and, in turn, profitability have deteriorated, when compared to peers, as the Company had to divert its sales to local market.
The ratings of Tata Textile reflect the financial risk profile of the Company, which is characterized by moderate leveraging, strong coverages – despite high interest rates and adequate working capital management. Long association of experienced and professional management team adds comfort. Going forward, management is planning to merge all three textile entities in order to benefit from the economies of scale.
The ratings are dependent on improving business margins while maintaining financial risk at low level. Prudent management of short-term liquidity and sustained coverages are important. Going forward, materialization of successful merger of all three textile entities would be rating essential.
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