Lahore, July 02, 2021 (PPI-OT):Saif Textile Mills limited (Saif Textile), a prominent textile venture of Saif Group, is involved in manufacturing and marketing of several varieties of cotton yarn including, melange yarn, dyed yarn, man-made yarn and raw white yarn. The top line of the Company has recorded a healthy growth. During 9MFY21, underpinned by higher volumetric sales and favourable yarn prices. Hence, the Company recorded good net profitability after losses in FY20. Improvement in profitability reflects on the margins of the Company. The company’s financial risk profile remains adequate. Improvement in coverage witnessed after healthy profitability, however leveraging remains towards margin end.

Going forward, with better efficiency and specialized product profile, the management expects Saif Textile’s margins to improve further. COVID-19 is an ongoing challenge. The proactive measures are taken by the regulators and other concerning bodies have mitigated the potential damages much anticipated from this pandemic. Vigilance is required as the loan repayment cycle remains amid variants of the pandemic continue to re-emerge. The assigned ratings incorporate an experienced management team, the strong financial muscle of the Sponsors and their willingness to support the entity as demonstrated historically.

The ratings are dependent on managing financial obligations effectively while improving business margins. Any further accumulation of debt and/or shift from current business strategy, impacting the risk profile of the entity, may negatively affect the ratings. Going forward, Saif group’s support to the entity and prudent debt management would remain 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