Press Release

VIS Reaffirms Entity Rating of Mustaqim Dyeing & Printing Industries (Private) Limited

Karachi, May 15, 2024: VIS Credit Rating Company Limited (VIS) has reaffirmed the entity ratings of Mustaqim Dyeing & Printing Industries (Private) Limited at ‘A-/A-2’ (Single A Minus/ A-Two). The medium to 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-2’ denotes good certainty of timely payment. Liquidity factors and company fundamentals are sound. Access to capital markets is good. Risk factors are small. Outlook on the ratings is ‘Stable’. Previous rating action was announced on March 01, 2023.

Mustaqim Dyeing & Printing Industries (Private) Limited (MDPIPL), a member of the Gani & Tayub (G&T) group, was founded in Pakistan on May 15, 1991, as a Private Limited Company. Specializing in yarn, home textiles, socks, and knitted fabric, MDPIPL serves both domestic and international markets. The Company's registered office is situated at D-14/A S.I.T.E, Karachi.

Assigned ratings incorporate the medium business risk profile of the textile sector in Pakistan, marked by exposure to economic cyclicality and moderate competition. The sector's performance is influenced by broader economic conditions, rendering it susceptible to demand fluctuations driven by economic factors. Furthermore, as a substantial contributor to total exports, the textile industry faces exposure to global economic cyclicality, geopolitical challenges, and liquidity constraints due to time involved in sales tax refunds. Supply-side risks, including local cotton crop production and reliance on imported raw materials, expose the sector to exchange rate risk.

Assigned ratings take into account the Company’s business updates; In FY23, MDPIPL saw a notable YoY growth in net sales, attributed to rupee depreciation. However, Net profit margin declined due to increased finance costs. Overall profitability ratios were marginally below the average of its peers wherein management expects improvement, going forward. Gross margins registered improvement amid rupee depreciation while net margins declined amid higher finance cost. Going forward, gross margins are expected to stay in line during the rating horizon whereas net margins are forecasted to improve with the expected decrease in interest rates.

The assigned ratings also account for the Company’s financial risk profile. In FY23, Funds from operations (FFO) grew by 8.8% despite a decline in profitability, driven by higher non-cash expenses. FFO to total debt and FFO to long-term debt ratios improved slightly compared to FY22. The Company's Debt Service Coverage Ratio (DSCR) at 1.4x hovers around the average of its peers. Sustaining this ratio is crucial from a ratings perspective. The Company maintained an adequate current ratio of 1.37x as of June 2023. In terms of capitalization indicators, the Company's gearing position remained intact and the leverage indicators remain within manageable levels.

For further information on this ratings announcement, please contact at 021-35311861-64 or email at

Applicable Rating Criteria: Corporates:

VIS Issue/Issuer Rating Scale

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