Press Release

VIS Maintains Ratings of Gadoon Textile Mills Limited

Karachi, November 13, 2020: VIS Credit Rating Company Limited (VIS) has maintained the entity ratings of Gadoon Textile Mills Limited (GTML) at ‘A+/A-1’ (Single A Plus/A-One). The long-term rating of ‘A+’ signifies good credit quality and adequate protection factors; risk factors may vary with possible changes in the economy. The short-term rating of ‘A-1’ signifies high certainty of timely payment; liquidity factors are excellent and supported by good fundamental protection factors while risk factors are minor. Previous rating action was announced on April 24, 2020.

GTML is part of Yunus Brothers Group (YBG). The company is one of the largest spinning enterprise in the country and has around three decades of experience in the textile sector. GTML produces yarn (both coarse & fine counts) through two units located at Swabi District in Khyber Pakhtunkhwa (Unit A) and at Karachi in Sindh (Unit B) and knitted fabric through Unit B. The company’s yarn is primarily sold to large scale local textile industry, the key markets being Karachi, Faisalabad and Lahore. GTML also sells products to international market. “Koyal” (local) and “Peach” (export) are two of GTML’s key brands.

Citing improvement in operating performance in Q1’FY21, the outlook assigned to GTML’s ratings has been revised to ‘Stable’. This revision in rating outlook reflects improvement in performance of GTML, with topline in Q1’FY21 being 18% higher than SPLY. Given the reduction in benchmark rates, the financing cost for the company has also reduced, reflecting positively on the bottomline. Even though concerns of a 2nd wave of Covid-19 remain elevated, we expect the order book for the industry to remain strong in the ongoing year, easing our business risk concerns. The assigned ratings remain dependent on maintenance of liquidity & capitalization metrics in line with the threshold.

For further information on this rating announcement, please contact Mr. Arsal Ayub (Ext: 214) or the undersigned (Ext: 101) at 35311861-66 or email at info@vis.com.pk.



Saeed Khan
Executive Director

Applicable Criteria: Industrial Corporates (May 2019)
http://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 November 13, 2020 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.