Press Release

VIS maintains Ratings of Gohar Textile Mills (Pvt.) Limited with ‘Rating Watch-Negative’ status

Karachi, April 17, 2020: VIS Credit Rating Company Limited (VIS) has maintained entity ratings of Gohar Textile Mills (Pvt.) Limited (GTML) at ‘A/A-1’ (Single A /A- One). The medium to long-term rating of ‘A’ denotes good credit quality with adequate protection factors. Moreover, the risk factors may vary with possible changes in economy. The short-term rating of ‘A-1’ denotes high certainty of timely payment, liquidity factors are excellent and supported by good fundamental protection factors. The previous rating action was announced on March 26, 2019.


GTML operates as an export oriented value-added textile unit being a family owned business with the shareholding vested among individuals of the same family. The maintenance of ratings assigned to GTML take into account the company’s momentum in profitability on a timeline basis due to volumetric growth, sound liquidity indicators, low leverage indicators with limited dependence on long-term borrowings and adequate debt service coverages. Sustainability in business risk profile and improvement in margins and profitability in the given rating horizon are important rating determinants, going forward.

With the advent of global corona virus pandemic, the demand outlook for textile products in general and especially value added export oriented units looks weak. Status of the assigned rating is therefore uncertain as an event of deviation from expected trend has occurred; additional information will be necessary to take any further rating action, warranting a ‘Rating-Watch’ status. With the demand compression emerging from ongoing global crisis and continued lockdown situation, ratings are being placed on ‘Negative’ outlook. The ratings are dependent upon maintenance of overall sales, market share in exports, profit margin, debt service coverage, and gearing ratios at an adequate level, with outlook subject to be reviewed once the situation stabilizes.

For further information on this rating announcement, please contact Ms. Maham Qasim (042-35723411-13, Ext. 8005) and/or the undersigned at 021-35311861-66 (Ext. 306) or email at
info@vis.com.pk .

Faryal Ahmad Faheem
Deputy CEO

Applicable rating criterion: Corporates (May 2019)
https://www.vis.com.pk/kc-meth.aspx

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 April 17, 2020 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.