Lahore, May 06, 2022 (PPI-OT):The ratings reflect the established position of Nishat Mills as a premier export-oriented composite unit, with a sizable strategic portfolio and conservative capital structure. The Company enjoys prominence in textile sector due to wide array of its products, extensive outreach and stable customer base.

Meanwhile, the Company’s revenues are consistently on a growing trajectory on account of both favourable rate and volume variance. Moreover, a factor of continuous BMR has assisted the Company in maintaining its leading position. The diverse and sizable investment portfolio, emanating from the Company’s implicit Holdco status within the Group, generates regular dividend stream, supporting core income recorded at PKR 1.9bln as at end-Dec-21.

Although Nishat remained moderately leveraged, its leveraged increased from 28.7% to 39.4% as at end-Dec’21 mainly due to increase in short-term borrowing. The Company’s association with Nishat Group as its flagship entity, remains a key rating factor. Textile industry dynamics are proving to be vigorous mainly due to increase in demand for textile products internationally and channeling of export orders towards Pakistani market. Export’s front witnessed a strong increase and is expected to stay positive in the medium term where the demand for textile products is expected to sustain.

Meanwhile, the Company continues to receive sizable dividend income from its diversified investment portfolio that provides comfort to the ratings. The Company is expected to maintain its very strong financial profile. The ratings are dependent on the Company’s ability to sustain its core margins and profitability. Preserving low leveraged capital structure and sound coverages remains imperative.

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