Karachi, August 09, 2021 (PPI-OT):VIS Credit Rating Company Limited (VIS) has assigned initial entity ratings of ‘BBB-/A-2’ (Triple B Minus/A-Two) to Sohail Textile Mills Limited (SOT). The medium to long-term rating of ‘BBB-’ denotes adequate credit quality coupled with reasonable and sufficient protection factors. Moreover, risk factors are considered variable if changes occur in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payment coupled with sound company fundamentals and liquidity factors. Outlook on the assigned ratings is ‘Stable’.

SOT is a part of Ayesha Group, which is one of the renowned players in yarn spinning industry of Pakistan. Shareholding of the company is vested with the sponsoring families. The assigned ratings take into account extensive experience, spanning nearly half a century, of the sponsoring family, and established relations with customers.

The ratings incorporate some growth in sales and improvement in gross margins in the ongoing year in tandem with growth in textile sector. Liquidity is considered adequate in terms of coverages. Given modest growth in equity base due to limited profitability and increase in borrowings, leverage indicators have remained high. The ratings are constrained by small scale of operations and vulnerability of spinning sector to raw material prices. The ratings will remain sensitive to any further increase in gearing, maintenance of adequate coverages and sustained improvement in net margins.

For more information, contact:
Director Compliance and Rating Analytics,
VIS Credit Rating Company Limited
VIS House, 128/C, 25th Lane off Khayaban-e-Ittehad,
Phase VII, DHA, Karachi, Pakistan
Tel: +92-21-35311861-72
Fax: +92-21-35311873
Email: bilal@jcrvis.com.pk
Website: https://www.vis.com.pk/