Lahore, July 18, 2022 (PPI-OT): The ratings of Diamond Fabrics Limited reflect the Company’s strong business profile emanating from its presence in the broader value chain in the international market; enabling the Company to fare better against volatility. The Company has a presence with four divisions (i) Spinning, (ii) Weaving iii) Denim iv) Apparel. In the last few years, the topline recorded growth where the mix largely remained tilted towards exports. During FY21, Company’s margins exhibited attrition while the net probability recorded an uptick. Other income supplemented the overall profitability of the company.

Further, the expansion in the operations also includes backward and upward integration. Coverage witnessed recent improvement though the leverage is high. Ratings further incorporate the association of the Company with the well-established Sapphire Group which enjoys a distinguishing presence in several sectors. Sponsor’s support, in case of need, will be available. During 9MFY22 (Jul21-Mar22), Pakistan textile exports surged to $14.2bln (recording a growth of 25%) as compared to $11.3bln in the same period last year. This is attributable to an increase in demand for textile products and channeling export orders toward the Pakistani market.

On a YoY basis, the exports of raw cotton, cotton (carded or combed) and cotton cloth recorded notable growth. Going forward, the textile sector’s outlook is expected to stay good in the medium term where demand for textile products is expected to sustain. The ratings are dependent on sustaining the business profile of the Company by maintaining profitability and margins achieved from core textile operations. Sustainability of non-core income and prudent management of surplus funds will be ratings critical.

For more information, contact:
Analyst,
The Pakistan Credit Rating Agency Limited (PACRA)
Awami Complex, FB1, Usman Block New Garden Town,
Lahore, Pakistan
Tel: +92-42-5869504-6
Fax: +92-42-5830425
Email: hammad.rashid@pacra.com
Website: www.pacra.com