PACRA Upgrades Entity Ratings of M.Y. Bari Mills (Private) Limited

Lahore, December 31, 2018 (PPI-OT): The ratings of M.Y. Bari Mills (Pvt.) Limited (Bari Mills) reflect its small yet growing business profile. Bari Mills is a family owned small scale private company owned 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.

Currency devaluation has boded well with export oriented textile companies. Whereas, towel and denim industry continues to surge forward on the back of Pakistan’s cotton which is more suitable for coarse counts yarn. Towel industry continues to give good margins which is reflected in Bari Mills profitability. On standalone basis, the company’s concentration levels – both customer and geographical – are significantly high with majority of company revenues (~62%) emanates from a single customer.

However, the ratings draw comfort from the Bari group’s overall customer base. Financial risk of the company needs better management which is reflected by highly 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 become strong. The ratings further incorporate the young management team and the family’s long association with textile sector.

The ratings are dependent on sustaining business margins, reducing customer concentration and maintaining financial risk at low level. Meanwhile, strengthening of governance framework for better oversight of strategic affairs is considered 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