Press Release

VIS Maintains Entity Ratings of Indus Home Limited

Karachi, August 1, 2022: VIS Credit Rating Company Limited (VIS) has maintained entity ratings of Indus Home Limited (IHL) at ‘A-/A-2’ (Single A Minus/A-Two). Outlook on the rating has been revised from ‘Positive’ to ‘Stable’. Long-term entity rating of ‘A-’ reflects good credit quality, adequate protection factors. Risk factors may vary with possible changes in the economy. Short Term Rating of ‘A-2’ indicates good certainty of timely payment, liquidity factors and company fundamental factors are sound. Previous rating action was announced on May 25, 2021.

Ratings factor in double-digit growth in topline post-COVID-19 contributed by higher average selling prices and volumes. With plans on adding new retail clientele and current order pipeline, sales revenue is expected to sustain this growth momentum, going forward. The revision in rating outlook incorporates weakening in profitability profile on a timeline basis due to rising input costs and inability to pass on the impact of the same to the clients since prices are locked for a quarter or for a season. Impact of rising interest costs associated with elevated debt levels may put pressure on the thin net margins of the Company. However, support is drawn from the commencement of spinning unit which is projected to improve margins of the company. Projected improvement in margins through enhancing operating efficiency because of backward integration is considered important.

Ratings take note that while some recovery was witnessed in FY22, cash flow coverages remain under pressure against elevated outstanding obligations. Debt serving ability remained satisfactory at the end of the period, and there was sufficient coverage of stock-in-trade and trade debts against short-term borrowings as well. Leverage indicators have increased over time to finance backward integration and working capital needs. Improving capitalization indicators over the rating horizon through meeting projected profit levels and retaining the same is considered important from a ratings perspective.

For further information on this rating announcement, please contact Ms. Asfia Aziz (Ext: 212) or the undersigned (Ext. 201) at 021-35311861-70 or email at

Javed Callea

Applicable Rating Criteria: Industrial Corporates (August 2021)

Information herein was obtained from sources believed to be accurate and reliable; however, VIS Credit Rating Company Limited (VIS) does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information.VIS , the analysts involved in the rating process and members of its rating committee do not have any conflict of interest relating to the rating(s)/ranking(s) mentioned in this report.VIS is paid a fee for most rating assignments. This rating/ranking is an opinion and is not a recommendation to buy or sell any securities. Copyright 2022 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .

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