Karachi: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings for Indus Home Limited at ‘A-/A-2’, indicating a stable financial outlook and a good credit quality. The long-term rating of ‘A-’ suggests adequate protection factors, although susceptible to economic shifts, while the short-term ‘A-2’ rating underscores a reliable likelihood of meeting short-term financial obligations.

According to VIS Credit Rating Company Limited, Indus Home Limited, a subsidiary of Indus Dyeing and Manufacturing Company and part of the broader Indus Group, continues to navigate the competitive textile sector with a comprehensive production lineup that includes terry cloth, garments, and other related products. Despite the inherent risks tied to economic fluctuations and global market dynamics, the company has seen a significant 34% increase in sales in FY23 and a year-over-year growth of 28% in the first nine months of FY24, primarily due to heightened yarn sales.

The ratings reflect not only Indus Home’s growth trajectory but also its adept management of financial health indicators. The company has successfully expanded its gross margins through strategic in-house yarn production, although a recent shift in product mix towards lower-margin goods has slightly dampened profitability. Financially, Indus Home maintains a satisfactory liquidity profile, with its Debt Service Coverage Ratio (DSCR) and Funds from Operations (FFO) to debt metrics experiencing some fluctuations but remaining within acceptable bounds. The company’s ability to sustain its DSCR will be crucial for maintaining its credit standing going forward.