Press Release

VIS Credit Rating Company Reaffirms Entity Ratings of Towellers Limited

Karachi, December 30, 2022: VIS Credit Rating Company Limited has reaffirmed entity ratings of ‘A/A-1’ (Single A Plus/A-One) assigned to Towellers Limited. Long Term Rating of ‘A’ denotes good credit quality; protection factors are adequate. Risk factors may vary with possible changes in the economy. Short Term Rating of ‘A-1’ signifies high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors; and risk factors are minor. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on January 07, 2022.

Incorporated in 1973 as a private limited company with subsequent conversion into a Public Limited Company in 1994, Towellers Limited is principally engaged in exports of knitted garments and home textiles. The Company has manufacturing facilities based in Federal B. Area and North Karachi Industrial Area, Karachi.

Reaffirmation of ratings take note of notable uptick in revenues owing to volumetric and price driven increase in sales and sustained margins in FY22. Revenues and margins reflect further improvement in 1QFY23 on the back of currency gains, however, the slowdown in textile sector demand internationally may impact future growth. Ratings take into account sound capitalization indicators, as the Company has historically operated on low leverage structure, although, during the year the Company’s total borrowings increased, albeit remaining low. Overall liquidity metrics and cash flow coverages of the Company remain sound. Going forward, maintenance of a low gearing structure along with, stable and sustained margins amidst slowdown in international demand and weakening in macroeconomic indicators will remain important for the assigned ratings.

For further information on this rating announcement, please contact Ms. Syeda Batool Zehra Zaidi (Ext: 210) or the undersigned (Ext: 207) at 021-35311861-66 or email at info@vis.com.pk.





Sara Ahmed
Director

Applicable 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 December 30, 2022 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.