Press Release

JCR-VIS Reaffirms Entity Ratings of Indus Dyeing and Manufacturing Company Limited

Karachi, January 26, 2017: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of Indus Dyeing and Manufacturing Company Limited (IDMCL) at ‘A+/A-1’ (Single A-Plus/A-One). Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on May 4, 2015.

The assigned ratings reflect the organization’s sustained local and international market position, strong brand name, demonstrated resilience to textile sector’s dynamics and prospective diversification. Ratings draw support from IDML’s functioning under the Indus Group of Companies, which is engaged in spinning, ginning, towel making and plans to enter power generation.

In tandem with industry, company’s performance has depicted a declining trend post reversal of China’s aggressive stock piling policy. However, IDMCL has depicted recovery and recouped profit to FY15 levels in three months ending September 2016 (1QFY17: Rs. 221m; FY16: Rs. 92m; FY15: 276m). Though sales declined over FY16, the company’s consistent quality provided it a competitive edge. Likewise, leverage and liquidity indicators weakened in FY16 but remained commensurate with assigned ratings; the same have improved in the ongoing year. Diversification of operations through prospective deployment of wind power plant and recent uptick witnessed in home textile may help to mitigate business risk. Furthermore, the announcement of recent textile package with benefits for export oriented companies including removal of tax from imports and application of new duty drawback mechanism is expected to positively affect the industry in general, going forward.

For further information on this rating announcement, please contact the undersigned (Ext: 207) or Mr. Javed Callea (Ext. 201) at 35311861-70 (10 lines) or fax to 35311873.





Jamal Abbas Zaidi
Advisor

Applicable Rating Criteria: Industrial Corporates (May 2016)
http://www.jcrvis.com.pk/docs/Corporate-Methodology-201605.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 January 26, 2017 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.