Press Release

VIS Reaffirms Entity Ratings of M.K. Sons (Pvt.) Limited

Karachi, April 22, 2022: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of M.K. Sons (Pvt.) Limited (MKSL) at ‘A-/A-2’ (Single A Minus/A-Two). The medium to long-term rating of ‘A-’ signifies good credit quality with strong protection factors. Moreover, risk factors may vary with possible changes in economy. The short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and company fundamentals. Outlook on the assigned ratings is ‘Stable’. The previous rating action was announced on March 05, 2021.

The ratings assigned to MKSL take into account the company’s presence in export oriented value-added textile segment, growth in revenue combined with steady improvement in profitability over the review period, and experience of management team in the relevant industry. Increase in exports was mainly led by higher volumetric sales of made-ups and denim garments as well as favorable prices for the key product categories which positively impacted the profit margins. The management is expecting healthy revenue growth during the ongoing year, mainly led by higher made-ups sales and increased contribution of denim garments segment. Liquidity profile is considered stressed as reflected in low short-term coverage and marginal current ratio on a timeline basis. Given elevated current maturity for FY22 and notable increase in benchmark rates, liquidity is expected to remain under pressure, going forward. Meanwhile, leverage indicators are elevated due to increased utilization of short-term borrowings for enhanced working capital requirements and mobilization of fresh long-term borrowings to fund capex. Going forward, the ratings are dependent on realization of revenue targets, maintenance of margins and debt servicing coverages, improvement in liquidity, and rationalization of leverage indicators.

For further information on this rating announcement, please contact Syed Fahim Haider at 042-35723411-13 (Ext: 8006) or the undersigned at 021-35311861-70 (Ext. 201) or email at info@vis.com.pk









Sara Ahmed
Director

VIS Entity Rating Criteria: 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 April 22, 2022 VIS Credit Rating Company Limited. All rights reserved. Contents may be used by news media with credit to VIS.