Press Release

VIS Assigns Initial Entity Ratings to Zahra Textile

Karachi, December 29, 2021: VIS Credit Rating Company Limited has assigned initial entity ratings of ‘A-/A-2’ (A Minus/A-Two) to Zahra Textile (ZT). Long Term Rating of ‘A-’ reflects good credit quality with adequate protection factors. Risk factors may vary with possible changes in the economy. Short Term Rating of ‘A-2’ signifies good certainty of timely payment, sound liquidity factors and company fundamentals, and good access to capital markets. Risk factors are small. Outlook on the assigned ratings is ‘Stable’.

Zahra Textile (ZT) is a family owned partnership concern primarily engaged in manufacturing and sale of yarn. The Company has a small paper and paper board segment producing brown paper as raw material for producing corrugated box cartons. Manufacturing facility is located in Nooriabad District Jamshoro, Sindh while Head office is based in Karachi.

The assigned ratings take into account long time experience of sponsors and positive growth in revenue over time supported by sound margins and higher operational efficiencies resulting in strong balance sheet footing. Positive outlook of the textile sector on the back of higher demand in export market bodes well for ZT. Ratings also incorporate strong capitalization indicators reflective of Company’s conservative financial policy status. Corporate governance structure provides room for improvement. Going forward, achieving sustained profitability and maintaining sound capitalization indicators will be important for ratings.



For further information on this rating announcement, please contact Ms. Sara Ahmed (Ext: 207) or the undersigned (Ext: 204) at (021) 35311861-66 or email at info@vis.com.pk .




Faryal Ahmad Faheem
Deputy CEO




Applicable Rating Criteria: Industrial Corporates (August 2021)
https://docs.vis.com.pk/docs/CorporateMethodology202108.pdf

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 2021 VIS Credit Rating Company Limited . All rights reserved. Contents may be used by news media with credit to VIS .