Lahore, August 01, 2022 (PPI-OT):Sarena Textile Industries (Private) Limited specializes in weaving, dyeing, printing, finishing and stitching. The Company offers various finished products and has created a niche where it processes and produces specialized cloth for fire resistant and other uniforms. The company is also licensee for PROBAN® in Pakistan. The Company employs experienced professionals, aided by comprehensive reporting, who look after operations of the Company with complete autonomy. The Company has established its presence in the overseas market and also considered a strong player in local market as the revenue is balanced almost equally between the local and export market.
Captive clientele in shape of group companies, provide an advantage in local sale. The Company’s performance showed resistance, compared in the relative universe. In FY22, revenues depicted increase along with strengthened operating profit. Despite of increase in finance costs, bottom-line demonstrated a significant increase. The Company has a strong financial profile characterized by strong coverage and improving working capital management. Almost all of the borrowings of the Company are on SBP concessional rates, safeguarding it from volatility of interest rate.
Working capital cycle reduced considerably driven by lower inventory days. 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 internationally and the channeling of 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.
The ratings are dependent on the management’s ability to improve its operations and margins amidst tough prevailing conditions in Pakistan and internationally. Maintaining good working capital management practices and strong coverages is important. Adverse movement in margins and/or coverages will impact the Strengthening of equity base will remain vital in rating upgrade.
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