Press Release

VIS Reaffirms Entity Ratings of Two Star Industries (Pvt.) Limited

Karachi, October 18, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Two Star Industries (Pvt.) Limited (‘TSIPL’ or ‘the Company’) at ‘BBB+/A-2’ (Triple BBB Plus/ A-Two). The medium to long-term rating of ‘BBB+’ denotes adequate credit quality; and adequate protection factors. Risk factors are considered variable if changes occur in the economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments. Liquidity factors and company fundamentals are considered sound. Access to capital markets is good, risk factors are small. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on August 20, 2021.

Incorporated in 2016, Two Star Industries (Pvt) Limited is co-owned by Umer Group of Companies and RYK Group. The principal business of the Company is manufacture and sale of white refined sugar. The registered office of the Company is located in Lahore, Punjab, whereas the manufacturing facility is situated in District Toba Tek Singh. The assigned ratings take into account satisfactory operating track record, and extensive experience of sponsors in the sugar sector.

VIS classifies the business risk profile of Sugar sector as ‘Medium’, which incorporates high cyclicality medium competition, capital intensity and technology risk, low energy sensitivity and high regulatory risk. TSIPL’s financial risk profile is elevated, given high level of gearing. The management has projected the gearing to decline to moderately high level by end-MY23. Nevertheless, amidst growing business volumes and rising running finance requirements, this will likely be a challenging task. VIS will continue to monitor the changes in financial risk profile on an ongoing basis.

For further information on this rating announcement, please contact Mr. Arsal Ayub, CFA (Ext: 215) or the undersigned (Ext: 207) at (021) 35311861-66 or email at info@vis.com.pk.



Sara Ahmed
Director

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 October 18, 2022 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.